# CE2004084EN.01002101.xml

| 3.4.2004 | EN | Official Journal of the European Union | CE 84/21 |
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3.4.2004

EN

Official Journal of the European Union

CE 84/21

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(2004/C 84 E/0023)

WRITTEN QUESTION E-2433/03

by Ilda Figueiredo (GUE/NGL) to the Commission

(22 July 2003)

Subject:   Quota for sugar production in the autonomous region of the Azores

Subject:

The Azorean agricultural company Sinaga SA, which produces beet sugar in the outermost region of the Azores, is experiencing problems owing to the growing difficulties being encountered with the reduction in the production quota being made at administrative level. The Treaty concerning Portugal's accession to the European Union set sugar production for the Azores at 20 000 tonnes (quotas A + B), for either a beet processing undertaking or a refinery, stipulating that the remaining amount would be ‘up to a quantity limit expressed in white sugar equal to the difference between the actual production achieved within the framework of quotas A and Β and 20 000 tonnes’.

However, the Azores were removed from this scheme under Council Regulation (EC) No 1101/95 (1), when they lost the right to process 20 000 tonnes of sugar and instead produced only 10 000 tonnes. Now, according to Sinaga, the Commission is again seeking by administrative means to reduce the refining of white sugar, which is to be set at 6 500 tonnes/year in the autonomous region of the Azores, even though the production of sugar from beet is not sufficient to reach the limit of 10 000 tonnes of white sugar, as defined under Poseima, a situation which would threaten the company's viability. It might also be pointed out that Sinaga purchases raw sugar from Germany (C quota sugar).

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The Commission:

| 1. | What measures will it take to guarantee Sinaga's continuing operation, given its importance for the development of the outermost region of the Azores? |
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1.

What measures will it take to guarantee Sinaga's continuing operation, given its importance for the development of the outermost region of the Azores?

| 2. | Will recognition be given to the right of the autonomous region of the Azores to produce white sugar up to an amount of 10 000 tonnes/year, under the conditions laid down under Poseima, and will it therefore be authorised to import a further 2 500 tonnes of raw sugar this year, given that beet production will amount to only around 1 000 tonnes? |
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2.

Will recognition be given to the right of the autonomous region of the Azores to produce white sugar up to an amount of 10 000 tonnes/year, under the conditions laid down under Poseima, and will it therefore be authorised to import a further 2 500 tonnes of raw sugar this year, given that beet production will amount to only around 1 000 tonnes?

| 3. | Will it be possible for the autonomous region of the Azores to sell its production on traditional markets, i.e. to export around 4 000 tonnes of white sugar? |
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3.

Will it be possible for the autonomous region of the Azores to sell its production on traditional markets, i.e. to export around 4 000 tonnes of white sugar?

Answer given by Mr Fischler on behalf of the Commission

(17 September 2003)

(17 September 2003)

| 1. | The Commission takes the view that the survival of the sugar industry is important for the agricultural economy of the Azores. Beet production is traditional in the Azores and the existence of beet processing facilities is a requirement for it to be marketed.
  Recognising this, the Commission, whether by taking action on its own or proposing specific measures to the Council, has acted to ensure the continued existence of beet and sugar production in the Azores.
  Over the last few years the Commission has taken the following action:






  — | in 1997 it increased the aid for Sinaga for processing Azorean beet into sugar from EUR 100 to EUR 270/tonne; |
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1.

The Commission takes the view that the survival of the sugar industry is important for the agricultural economy of the Azores. Beet production is traditional in the Azores and the existence of beet processing facilities is a requirement for it to be marketed.

Recognising this, the Commission, whether by taking action on its own or proposing specific measures to the Council, has acted to ensure the continued existence of beet and sugar production in the Azores.

Over the last few years the Commission has taken the following action:

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in 1997 it increased the aid for Sinaga for processing Azorean beet into sugar from EUR 100 to EUR 270/tonne;

| — | in 2000 it proposed to the Council a 66 % increase in the aid for land under sugar beet from EUR 500 to EUR 800/hectare. The Council adopted the Commission's proposal in Regulation (EC) No 1453/2001 (2). |
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in 2000 it proposed to the Council a 66 % increase in the aid for land under sugar beet from EUR 500 to EUR 800/hectare. The Council adopted the Commission's proposal in Regulation (EC) No 1453/2001 (2).

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| 2. | The Commission encourages the sugar sector in the Azores by means of measures that are quite exceptional compared with the mechanisms applied in the rest of the Community under the common market organisation for sugar. In particular, beet growers and the Azorean sugar company are allowed to produce up to 9 953 tonnes of sugar per year from Azorean beet, and the sugar company is allowed to refine raw beet sugar purchased with a refund or on the world market under the specific supply arrangements, within the limits of the consumption needs of the Azores, which are currently estimated at 6 500 tonnes per year.
  The Commission deeply regrets the fact that, despite its efforts in the sector, the production of sugar from Azorean beet was only 700 tonnes in 2002. |
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2.

The Commission encourages the sugar sector in the Azores by means of measures that are quite exceptional compared with the mechanisms applied in the rest of the Community under the common market organisation for sugar. In particular, beet growers and the Azorean sugar company are allowed to produce up to 9 953 tonnes of sugar per year from Azorean beet, and the sugar company is allowed to refine raw beet sugar purchased with a refund or on the world market under the specific supply arrangements, within the limits of the consumption needs of the Azores, which are currently estimated at 6 500 tonnes per year.

The Commission deeply regrets the fact that, despite its efforts in the sector, the production of sugar from Azorean beet was only 700 tonnes in 2002.

| 3. | Sugar produced from Azorean beet may be marketed freely on markets outside the Azores.
  By contrast, sugar refined in the Azores, for which Sinaga is supplied under the specific supply arrangements, is intended to meet the requirements of the Azores themselves and may not be exported or shipped from the Azores, with the exception of traditional quantities. The Court of justice recently ruled on the concept of ‘traditional quantities’ in case C-282/00. It confirmed the correctness of the Commission's approach in considering traditional shipments or exports to be the average trade flows over the three years preceding the entry into force of the Poseima regime in 1992, i.e. 1989, 1990 and 1991. The Court of Justice ruled that the shipments had to be ‘ongoing, regular and significant’ ... ‘at the time that the Poseima Programme was implemented’ and that ‘Sporadic and small-scale shipments made in the past cannot satisfy those requirements’.
  As regards the future development of the Community sugar sector, in the last quarter of 2003 the Commission will present a communication on the reform of the common market organisation for the sector. In its initiatives, the Commission will take account of the special situation regarding sugar production in the outermost regions, so that the new balance of production and supply in the European Union does not entail any deterioration for the regions concerned.
  Also, the support instruments for processing businesses in the outermost regions, including the Azores, will be reviewed in the report on an overall strategy for sustainable development in the outermost regions which the Commission must adopt by the end of 2003. |
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3.

Sugar produced from Azorean beet may be marketed freely on markets outside the Azores.

By contrast, sugar refined in the Azores, for which Sinaga is supplied under the specific supply arrangements, is intended to meet the requirements of the Azores themselves and may not be exported or shipped from the Azores, with the exception of traditional quantities. The Court of justice recently ruled on the concept of ‘traditional quantities’ in case C-282/00. It confirmed the correctness of the Commission's approach in considering traditional shipments or exports to be the average trade flows over the three years preceding the entry into force of the Poseima regime in 1992, i.e. 1989, 1990 and 1991. The Court of Justice ruled that the shipments had to be ‘ongoing, regular and significant’ ... ‘at the time that the Poseima Programme was implemented’ and that ‘Sporadic and small-scale shipments made in the past cannot satisfy those requirements’.

As regards the future development of the Community sugar sector, in the last quarter of 2003 the Commission will present a communication on the reform of the common market organisation for the sector. In its initiatives, the Commission will take account of the special situation regarding sugar production in the outermost regions, so that the new balance of production and supply in the European Union does not entail any deterioration for the regions concerned.

Also, the support instruments for processing businesses in the outermost regions, including the Azores, will be reviewed in the report on an overall strategy for sustainable development in the outermost regions which the Commission must adopt by the end of 2003.

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(1)  OJ L 110, 17.5.1995, p. 1.

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(2)  Council Regulation (EC) No 1453/2001 of 28 June 2001 introducing specific measures for certain agricultural products for the Azores and Madeira and repealing Regulation (EEC) No 1600/92 (Poseima), OJ L 198, 21.7.2001.

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