1.7

The Commission's legislative proposal diverges from the communication of 14 July 2004 in: — its duration: the regulation will run until the 2014/2015 marketing year; — a minimum price for sugar beet that is reduced by 42.6 % over two marketing years (to EUR 25.05 per tonne), with a possible further 10 % reduction by way of an agreement within the trade; — a reference price for white sugar that will be cut by 39 % over four years (to EUR 385.5 per tonne), the net reference price being cut over two marketing years (the difference is the levy to be paid to the restructuring fund); — a production charge of EUR 12 per tonne of quota sugar, to be borne equally by growers and manufacturers; — A+B quotas merged to form one production quota, with an additional quota of one million tonnes to be divided between the Member States producing C sugar, in return for a payment of EUR 730 per tonne of additional quota; — a four-year restructuring scheme, with quotas decreasing progressively thereafter; — isoglucose quotas that are increased by 100 000 tonnes per year for three years; — market management provisions consisting of carrying forward out-of-quota sugar, giving the option to withdraw a percentage of quota sugar that is surplus to market requirements and the option of providing support for private storage when the market price falls below the reference price; — the possibility of the chemical and pharmaceuticals industry also buying out-of-quota sugar, as is done in the yeast and alcohol sectors and, in the event that supplies are difficult to obtain, of securing a specific Tariff Rate Quota; — until 2009/2010, a supply guarantee for full-time refiners, in line with their traditional needs; — the proposal does not impose limits on sugar imports from LDCs as of 2009/2010; — where exports are concerned, the proposal prohibits the export of out-of-quota sugar and does not consider the export of quota sugar without refund; — the Commission abandons both the transferability of quotas at European level and the linear reduction of quotas by 2 800 000 tonnes over four years. A restructuring plan will be put in place, to be funded by a levy on sugar, isoglucose and inuline quotas. More than 50 % of the levies on sugar quotas will be paid for by farmers through cuts in the price of sugar beet; — the restructuring fund will grant producers of sugar, isoglucose and inuline who give up their quota, cease production and dismantle their plants degressive aid, which varies according to the year in which they stop; — the Commission proposes that the restructuring fund cover up to 6 160 million quota tonnes, with a total budget of EUR 4.2 billion; — compensation equal to 60 % of the estimated revenue loss arising from the price cut in sugar beet will be granted to sugar beet and chicory growers in the form of decoupled aid, in line with the per-hectare amounts intended for A+B production and with a ceiling set for each Member State; — it will be left to each Member State to decide which reference period to use for distributing aid; — the total financial envelope proposed for direct income support for farmers will be EUR 907 million in 2006/2007 and EUR 1 542 million as of 2007/2008.