WRITTEN QUESTION E-1630/99

by Paulo Casaca (PSE) to the Commission

(15 September 1999)

Subject: Sugar and revision of Regulation (EEC) 1600/92

Sugar production and refining on the island of São Miguel, in the Autonomous Region of the Azores, are vital economic activities.

In the first place, they enable over a hundred jobs to be preserved at the local refinery and, secondly, act as a fillip to an important agricultural alternative which, used in conjunction with other crops, makes for more efficient land rotation.

Under Regulation (EEC) 1600/92 (Poseima)(1), the European institutions have been granted substantial protection to various agricultural products including sugar beet.

However, for various reasons to do with the smallness of the quota allocated and difficulties in the agricultural sector, sugar beet production has been falling from year to year, and the future viability of sugar production and refining in the Azores will be jeopardised if nothing is done to remedy the problem.

In the light of the principles governing the common agricultural policy, Article 299(2) of the EC Treaty, and the decisions taken at Cologne on the most remote regions, does the Commission not believe that Regulation (EEC) 1600/92 should be revised to enable sugar production and refining to continue in the Azores?

(1) OJ L 173, 27.6.1992, p. 1.

Answer given by Mr Fischler on behalf of the Commission

(25 October 1999)

Council Regulation (EEC) 1600/92 of 15 June 1992 concerning specific measures for the Azores and Madeira relating to certain agricultural products takes particular account of the cultivation of sugar beet and its processing into sugar. The Regulation provides per-hectare aid for sugar beet and aid for its processing into sugar by the industry.

Aid for the processing of sugar beet was increased from 10 to 27 per 100 kilograms by Commission Regulation (EC) 0562/98 of 12 March 1998 adjusting the special aid for the processing of sugar beet into white sugar in the Azores provided for in Article 25 of Regulation (EEC) 1600/92(1).

Despite these measures, the sugar beet crop, which was at first given a fresh boost by the Poseima programme, has been falling since 1994. The processing industry is not, however, directly affected by this disappointing development since it can import and refine raw sugar to meet the needs of the Azores. Economic conditions for the industry have not worsened but rather improved since it can import this sugar at world market prices (or with the equivalent aid if it purchases Community quota sugar).

If farmers in the Azores choose to grow crops other than sugar beet, the reasons must be sought in the general conditions of agricultural production. The viability of the sugar industry depends on the consumption of sugar, which has been falling in recent years. It is the principles of the specific supply arrangements, and in particular the principle of meeting local needs, which determine the utilisation of the capacity to refine from imported raw sugar.

If the Portuguese authorities were to request it, the Commission would consider these issues as part of the revision of Poseima now being undertaken.

(1) OJ L 76, 13.3.1998.