Leaked plan details EU sugar reforms
The plan to partially offset price and quota cuts by paying direct aid to growers follows the pattern of the CAP decoupling reform, aiming to make farmers more flexible and competitive in response to the market, but still supported with decoupled payments.
The document which is expected to form the basis of formal Commission proposals later in the year also says the sugar support system is becoming an anomaly, now that the rest of the CAP is more market-oriented.
Leaked communications indicate A and B sugar quotas should be merged and the combined EU sugar tonnage reduced from 17.4m tonnes to 14.6m tonnes over four years.
The C quota mechanism, where surplus sugar is sold at world prices, would remain.
The Commission also seems to be recommending an end to sugar intervention and the introduction of a new, but lower, 'reference price'. This will be used as the trigger level for a new private storage aid scheme and will form the basis of the minimum beet price for growers.
Cuts of 25% and 37% planned for 2005 and 2007 would bring the beet price down to just €27.40/t.
To soften the blow, compensation is proposed to cover about 60% of growers' losses. The proposals are expected to be sent to EU farm ministers and the European parliament in mid-July for comment.
Although driven by Agriculture Commissioner Franz Fischler, the proposals will largely be dealt with by his yet unknown successor; so Irish growers will be hoping that Joe Walsh could come successfully through the political jockeying now going on as the new 25 member European Commission slowly takes shape.
Whoever ends up in the Agriculture Commissioner's chair will face major opposition in sugar reform from the major sugar buyers who will fight hard for cheap sugar, whatever the consequences. for processors or farmers.
