WRITTEN QUESTION P-3307/00

by Jeffrey Titford (EDD) to the Commission

(17 October 2000)

Subject: European Union sugar regime

I have been informed by angry farmers in the East of England that the European Union has proposed a Regulation that will allow 48 of the least developed countries access to the EU sugar market to the tune of 2,2 million tons per year.

The Region that I represent produces about 70 % of UK sugar, with four major factories in Norfolk and Suffolk being supplied.

The farmers advise me that the proposed European Union Regulation will have a devastating effect on sugar beet production in my Region.

Will the European Commission please inform me what their assessment is of the effect of the proposed Regulation on the sugar beet industry in the East of England?

In particular, please inform me whether you agree with the assessment of Mr Kevin Field, Managing Director of British Sugar, plc. and Mr Adrian Gill, CBE, President of the National Farmers Union, that the Regulation will have these effects:

1. Immediate quota cuts?

2. Significant job losses?

3. The reduction of UK sugar processing?

4. The loss of one of the few reliable break crops for arable producers?

5. Decreasing the value of current trade concessions to existing ACP procedures?

6. An increase in EU expenditure through the sales to intervention of both beet sugar and ACP sugar?

7. A discriminatory impact on the UK, since much of the European Union's raw sugar refining capacity is located in this country?

Answer given by Mr Fischler on behalf of the Commission

(16 November 2000)

The Honourable Member is referring to the recent Commission trade proposal for a Council regulation amending Council Regulation (EC) No 2820/98 applying a multiannual scheme of generalised tariff preferences for the period 1 July 1999 - 31 December 2001 so as to extend duty-free access without any quantitative restrictions to products originating in the least-developed countries(1).

When drawing up its proposal the Commission recognised that a risk did indeed exist that imports of sensitive agricultural products such as sugar might increase above traditional levels with a resulting disturbance of the market organisations concerned. For this reason, free access is envisaged to be phased in over a transitional period of three years during which the impact can better be assessed.

In addition, safeguard measures are foreseen which provide for tariff concessions to be temporarily suspended in cases of fraud, failure to adhere to the rules of origin or huge increases in imports into the Community. Also the rules of origin and in particular the minimum added-value conditions will provide further safeguards.

The Commission is furthermore being consistent with its agricultural sector proposal on the common market organisation to apply in the sugar sector from 1 July 2001 onwards(2) which essentially provides for a breathing space of two years during which time deeper reforms will be examined on the basis of studies of the functioning of the common market organisation for sugar in particular and of the Community's agri-food processing industry as a whole.

The potential undesired side effects underlined by the Honourable Member do indeed present a challenge to the Community's policy in the sugar sector until now and demonstrate the difficulties in reconciling conflicting policy objectives. In the final analysis, however, the Commission has taken the view that the potential benefits from its proposal clearly outweigh the potential costs for the Community when an overall view is taken. This being said, the Commission will monitor very carefully future developments in the sugar sector with a view to taking appropriate measures as and when necessary.

(1) COM(2000) 561 final.

(2) COM(2000) 604 final.