WRITTEN QUESTION P-1986/00

by Giovanni Pittella (PSE) to the Commission

(8 June 2000)

Subject: Forthcoming start of the new marketing year for sugar and fixing of the basic price for sugar beet: consequences for Italy's southern region

Under Regulation No 2038/1999(1), the Commission must submit by this summer a proposal concerning the fixing of target prices for sugar and the basic price for sugar beet for the 2001-2001 marketing year.

The regulation provides for the progressive reduction of price support for sugar beet. If the aid in question were to be reduced as planned, it is calculated that the price of sugar beet, which is currently fixed at ITL 10 400 per quintal (after already having been reduced by 16 % in comparison to previous marketing years), would fall to below ITL 8 500 per quintal. That prospect would cause an insuperable crisis in the beet sector, with very serious consequences for the four sugar-processing plants in southern Italy and hence for employment throughout the southern region.

Is the Commission aware of the serious consequences of implementing its decision for sugar beet growing and sugar production in southern Italy, and of the economic and social implications?

Will the Commission take due account of the provisions of the regulation that allow for a more gradual reduction of aid in the southern region of Italy? Would the Commission be prepared to consider the introduction of supplementary support measures to compensate farmers in less-favoured areas for the increased costs of growing beet, and the lower output achieved? Does the Commission agree that it would be advisable to review the system of allocating quotas to Italy by converting the B quota and simultaneously increasing the A quota in order to limit the unfair imposition of penalty payments on producers in areas that are lagging behind in terms of development? Would the Commission consider the possibility of maintaining prices at the current level and thus averting a very serious crisis?

(1) OJ L 252, 25.9.1999, p. 1.

Answer given by Mr Fischler on behalf of the Commission

(12 July 2000)

It should be pointed out that, when Council Regulation (EC) No 2038/1999 of 13 September 1999 on the common organisation of the markets in the sugar sector is replaced shortly, that replacement will relate neither to setting the target price and the basic price of beet for the 2001/02 marketing year, nor to the system of national aid including that applied in Italy and authorised until 30 June 2001.

A number of the rules on quotas and preferential imports are to be replaced, however.

That said, the Commission is aware of the particular difficulties facing beet cultivation in the south of Italy.

In the interests of objectivity, the Commission would like to make two comments on the 16 % fall in the price of beet to which the Honourable Member refers and which, incidentally, the Commission does not dispute. Firstly, a not inconsiderable portion (about 6 %) of that 16 % fall results from the fact that, since the 1998/1999 marketing year, Italy has no longer been in deficit as regards sugar and that, under the basic Regulation on sugar, the Council had no choice but to set non-regionalised prices for the sugar sector in Italy. Secondly, it is likewise true that the remaining portion of the fall (about 10 %) results from the progressive reduction in the national aid allowed under Article 53 of that basic Regulation, which stipulates that the aid will apply to southern Italy for the last time during the 2000/01 marketing year. It should be noted, however, that this national aid referred to as provisional and approved initially for the period 1968/1969 to 1974/1975 will ultimately have lasted for 32 years. That is why the Council, judging that an exemption of such long duration must be easily sufficient for the sector to restructure as necessary in order to face up to the genuine common market, gave a clear signal to the interested parties in December 1997 by expressly deciding (through Regulation (EC) No 2613/97) to end all national aid in the sugar sector. If the beet and sugar sector in southern Italy has not restructured as necessary during those 32 years, then that can only be regretted.

In the light of the above, the Commission is not in a position to respond favourably to the Honourable Member's questions regarding inter alia additional measures to provide support or to maintain the current price level for southern Italy.