OPINION OF THE ECONOMIC AND SOCIAL COMMITTEE on the Proposal for a Council Regulation (EC) amending Regulation (EEC) Nos. 1785/81 on the common organization of the markets in the sugar sector and 1010/86 laying down general rules for the production refund on certain sugar products used in the chemical industry
Date: 1995-02-22
Institutions: European Economic and Social Committee
Subjects: chemical industry, common organisation of markets, production refund, sugar, sugar product













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51995AC0192

OPINION OF THE ECONOMIC AND SOCIAL COMMITTEE on the Proposal for a Council Regulation (EC) amending Regulation (EEC) Nos. 1785/81 on the common organization of the markets in the sugar sector and 1010/86 laying down general rules for the production refund on certain sugar products used in the chemical industry  


Official Journal C 110 , 02/05/1995 P. 0035 





Opinion on the proposal for a Council Regulation (EC)  amending Regulation (EEC) No 1785/81 on the common organization of the markets in the sugar sector  and Regulation (EEC) No  1010/86 laying down general rules for the production refund on certain  sugar products used in the chemical industry ()(95/C 110/10)On 15  December 1994 the  Council decided to consult the Economic and Social Committee under Articles 43 and 198 of the  Treaty establishing the European Community, on the abovementioned proposal. The Economic and Social Committee appointed Mr Charles Pelletier as Rapporteur-General (Rules 20  and 50 of the Rules of Procedure). At its 323rd Plenary Session (meeting of 22  February 1995), the Economic and Social Committee  adopted the following Opinion by a large majority, with nineteen votes against and seven  abstentions. PRELIMINARY COMMENTSThe Committee regrets that the limited time available to analyze and  consider the Commission's proposal has complicated the conditions in which it drew up its Opinion. It also regrets that the deadline set by the Council has prevented the Section for Agriculture and  Fisheries from preparing its work on this matter. 1. General comments 1.1. In the sugar and isoglucose sector, the production quota system provided  for in Regulation No  1785/81 has been repeatedly extended for short periods and amended for the  1994/95 marketing year by Regulation (EEC) No  133/94 which stipulates how inulin is to be included  in the quota system and the arrangements for self-financing. Since this regulation was adopted,  amendments have been made both to take account of the accession of Austria, Finland and Sweden, and  of Regulation (EEC) No 3290/94 implementing the GATT. 1.2. The Commission proposal does not radically alter the principles on which the organization of  sugar production has been based since 1968. Essentially, the Commission is proposing: a)a further six-year extension of the quota system and the self-financing arrangements; b)a guaranteed quota adjustment mechanism which would allow the EU to meet its export commitments  under the Uruguay Round Agreement on agriculture; c)a new rule on refining seeking to guarantee supplies to refineries to the level of their  traditional needs, in line with the import commitments entered into under the Uruguay Round  Agreement and with the ACP countries; d)various other measures which seek to reduce or abolish the financing of the C sugar carryover,  national adjustment aids in Italy, and EAGGF financial support for sugar used in the chemical  industry. While reserving the right to carry out further work on this subject, the Committee approves the  Commission's proposal, subject to the following comments: 2. Specific comments 2.1. In its Opinions of 25  November 1992 () and 28  April 1993 () on two  successive proposed amendments of Regulation No 1785/81, the Committee had asked the Commission to  submit a draft long-term Regulation in the sugar sector. For this reason it is pleased that the  present proposal answers that request, thus giving producers and processors the legal certainty  that they need for their cropping and investment decisions. 2.2. The Committee notes that the quota system and self-financing arrangements for the common  organization of the market in sugar have guided production and helped to avoid budgetary problems.  It has also divided up beet production and the refining industry among the Member States, helping  employment as well as the preservation and development of the rural areas concerned thanks to lower  relocation risks. 2.3. As this regime is different from others governing crops produced on a large scale, the  Committee believes that it can be extended over the next six marketing years. 2.4. The Commission has proposed the possible introduction of a quota-lowering mechanism to comply  with EU export commitments. The burden of these commitments are in this way passed on to the  producers and processors. 2.5. The Committee observes that the Commission did not first of all attempt to secure the sale of  a higher volume of Community production in this sector throughout the Union, by introducing new  mechanisms and financing which encourage sugar promotion, especially for non-food uses. 2.6. The Committee accepts the quota adjustment mechanism proposed by the Commission. It does,  however, ask the Council to apply it with the proviso that the Commission firstly starts to manage  stocks and internal marketing vigorously. 2.7. Responding to repeated requests from refiners and the ACP countries which export sugar to the  Community, the Commission is proposing new rules for refining. The Committee sees the rationale of  this proposal, which gives the refining industry supply guarantees that it has not previously  enjoyed, and offers the ACP countries new scope for preferential access. 2.8. However, these new guarantees are being introduced at a time when the guarantees given to beet  and sugar producers are to be lowered under GATT. 2.9. Thus the Committee believes that the quotas for refining should not be set at a higher level  than those proposed by the Commission. 2.10. The Committee also firmly believes that the special preferential imports should be provided  exclusively by the ACP countries. 2.11. The Committee, recalling its Opinion of 25  November 1992, is adamant that, when the special  tariff and minimum import prices for ACP sugar are set, Community preference should be maintained  throughout the EU with regard to white sugar and raw sugar produced within the EU. 2.12. The Committee also reiterates the position that it took on 28  April 1993. It requests that  it is made clear that quota transfers between different sweeteners (sugar, isoglucose and inulin)  will be strictly prohibited. The Committee believes that this ban should be extended to quotas for  refining and transfers between Member States in order to reduce relocation risks. 2.13. The Committee believes the carryover mechanism to be part and parcel of the quota system.  Since 1981/82 it has helped to remove the consequences of variations in annual yield or fluctuating  world prices, and it also ties in with the objective of stabilization of supplies from Community  and world markets. 2.14. This has also always been the Council's point of view, twice rejecting the Commission's  restrictive proposals in this area. The Committee now asks the Council to reject for a third time -  the Commission's proposal to abolish carryover financing, since this proposal will inevitably  result in the unnecessary disruption of sugar sales, both within and outside the EU. It will also  lead to a loss of income across the agricultural sector. 2.15. The Committee welcomes, however, the Commission's proposal to apply carryover financing to A  and B sugar which has become C sugar under pressure from GATT. 2.16. Until now, the EAGGF has financed production refunds for the use of sugar, starch or glucose  in the chemical industry, up to a limit of 60 000 tonnes in the case of sugar (Article  9 of  Regulation No 1010/86) and in unlimited quantities in the case of starch and glucose. 2.17. The Committee asks the Council to reject the Commission's proposed discarding of Article  9  since that would lead to total discriminatory EAGGF withdrawal from the sugar sector insofar as it  concerns the chemical industry. It would also cost European growers and processors between ECU 25  and 30 million. 2.18. Since 1968, Italy has been authorized to grant national adjustment aid to its beet and sugar  sector. The Commission is proposing that the Council should reduce or abolish this aid, according  to the region. 2.19. The Committee wonders about the reliability of the statistics provided by the Commission in  support of its proposal since official figures show a 30% difference in yield between the EU  average and the most favoured regions in Italy. It therefore calls on the Council, before taking a decision, to bear in mind that to cut or abolish  such aid would inevitably result in a sharp decrease in beet crop areas and serious repercussions  for jobs in the sugar industry. Done at Brussels, 22  February 1995. The Presidentof the Economic and Social CommitteeCarlos FERRER() OJ No C  377, 31. 12. 1994, p. 18.  () OJ No C 19, 25. 1. 1993.  () OJ No C 161, 14. 6. 1993.