Proposal for a Council Regulation (EC) authorising Portugal to grant aid to sugar beet producers and abolishing all such aid from the 2001/02 marketing year
Date: 1997-07-25
Institutions: European Commission
Subjects: Portugal, State aid, production aid, sugar, sugar beet

*'** 

COMMISSION  OF THE  EUROPEAN  COMMUNITIES 

Brussels,  25.07.1997 
COM(97)412  final 

97/0222  (CNS) 

Proposal  for  a 

COUNCIL  REGULATION  (EC) 

authorising Portugal to grant aid to sugar beet producers and abolishing all such aid 
from the 2001/02 marketing year 

(presented  by  the  Commission) 

EXPLANATORY  MEMORANDUM 

During  the  adoption  of  the  institutional  prices  in  the  sugar  sector  for  the  1997/98 
marketing  year  and  as  a  result  of  the  Council  of  Agriculture  Ministers  held  in 
Luxembourg  from  23 to  25 June  1997, the  following  compromise  was  approved  for  the 
sugar  sector: 

"13.  Given the special nature of the sugar industry in Portugal this year,  a diminishing 
state  aid  can  be  granted  to  sugar  beet producers  for  the four  marketing  years 
1997/98  to  2000/01.  No  state  aid  is  authorised  in  the  sugar  sector  from  the 
2001/02 marketing year  on. " 

The  purpose  of  this  proposal  for  a  Regulation  is  to  implement,  in  accordance  with  the 
above compromise, the following two measures: 

To  authorise  Portugal  to  grant  a (state) aid to  sugar  beet producers  located  in  its 
continental territory during the  1997/98 to 2000/01 marketing years. 

The  special  nature  of the  sugar  industry  in Portugal  this year  lies  in the  fact  that 
the production  quota for  A and  B sugar  of 60 000 tonnes  allocated  to  continental 
Portugal  on  its  accession  to  the  Community  in  1986  and  increased  to  70 000 
tonnes on  1  July  1995 has not been fully  utilised because of the absence of a sugar 
refining  establishment  in Portugal, which has also not encouraged  the  production 
of sugar beet. 

An  establishment  became  operational  at the  start  of the  1997/98  marketing  year, 
but  the  production  of  sugar  beet  on  much  of  the  land  suitable  for  it  is  still  an 
innovative operation for Portuguese producers. 

The  unit  amounts  of  aid  proposed  by  the  Commission,  reducing  over  the  four 
marketing  years,  are  those  suggested  by  Portugal.  The  aid  is  intended  to  favour 
the expansion of sugar beet production in continental Portugal. 

Parliament,  when  debating  the  1997/98  agricultural  prices  package  in  its  plenary 
session  on  12 June  1997, adopted  an  amendment  intended  to  grant  a  diminishing 
aid to sugar beet producers in Portugal. 

-1 

To revoke all state aids in the sugar sector with effect  from  the 2001/02 marketing 
year. 

In April  1995 the Council adopted the current arrangements in the sugar sector  for 
a further  six years, up to and  including the 2000/01  marketing  year, and  included 
in  them  the  provisions  required  to  implement  the  Uruguay  Round  Agriculture 
Agreement. 

The Council also expressed its intention to end the state aid arrangements  existing 
in various Member  States by stipulating the  1999/2000 marketing year as the last 
year  of  application  of  those  arrangements  in  most  cases,  and  the  2000/01 
marketing year in certain others. 

Therefore,  whereas, pursuant  to the current  Regulations, the  fate  of the  state  aids 
ending in  1999/2000 is very clear - they will be de facto equal to zero in 2000/01, 
the  last  marketing  year  of the  current  production  arrangements  - that  of the  state 
aids  ending  in  2000/01  is  less  so,  since  they  will  still  be  in  existence  in  the  last 
marketing year of the current arrangements. 

For  that  reason  it  is  necessary  (a)  to  create  clarity  with  regard  to  the  state  aids 
ending in 2000/01, and (b) to announce as soon as possible, with a view to proper 
management, the situation regarding them which will prevail in 2001/02. 

This proposal  therefore  provides for  the unit amount  of the aids in question to be 
abolished  with  effect  from  the  2001/02  marketing  year.  This  concerns  the 
following  three aid schemes: aid for sugar beet and sugar in southern Italy; aid  for 
cane  sugar  produced  in  Spain;  and  aid  for  the  refining  of  preferential  raw  cane 
sugar in the United Kingdom. 

Proposal for a 

COUNCIL REGULATION  (EC) No 

of 

authorising Portugal to grant aid to sugar beet producers and abolishing all such aid 
from the 2001/02 marketing year 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  establishing  the  European  Community,  and  in  particular 

Articles 42 and 43 thereof, 

Having regard to the proposal from the Commission1, 

Having regard to the opinion of the European  Parliament2, 

Whereas  the  production  of  sugar  beet,  a  new  industry  to  Portugal,  will  be  disadvantaged  by 

natural  problems,  at  least  in  its  start-up  phase;  whereas,  in  order  to  protect  it,  sugar  beet 

growers  should  be  encouraged  to  increase  production  by  means  of  a  provision  authorising 

Portugal  to  grant  temporary  and  diminishing  adjustment  aid  over  a  period  of  four  marketing 

years from  1997/98 to 2000/01; 

Whereas  Portugal  has  been  allocated  a  national  basic  quantity  for  its  continental  territory  of 

70 000 tonnes of sugar for the refining  of sugar from sugar beet; whereas a sugar beet  refining 

establishment was recently constructed with Community financial  assistance; 

Whereas, in addition, it should be stipulated that, with effect  from  the 2001/02 marketing  year, 

all  state  aids  authorised  by  virtue  of  Article  46  of  Council  Regulation  (EEC)  No  1785/81  of 

30 June  1981  on  the  common  organisation  of  the  market  in  sugar3,  as  last  amended  by 

Regulation (EC) No  1599/964, are abolished, 

HAS ADOPTED THIS REGULATION: 

1  OJNo 

2  OJNo 

3  OJNo  L  177, 1.7.1981, p. 4. 

4  OJ No L 206,  16.8.1996, p. 43. 

3 

Article 1 

1. 

During  the  1997/98 to 2000/01  marketing  years  Portugal  shall  be authorised,  under  the 

conditions  set  out  in  paragraph  2,  to  grant  adjustment  aid  to  sugar  beet  producers 

located in its continental territory. 

2. 

The aid referred  to in paragraph  1 may be granted  only  in respect  of the  corresponding 

quantity  of  sugar  produced  within  the  limit  of  the  A  and  B  quotas  of  the  sugar-

producing undertaking established in the region referred  to in paragraph  1. 

For the production referred  to in the first subparagraph, the unit  amount  of aid may not 

exceed: 

- 

in the  1997/98 marketing year: ECU 6.21 per  100 kilograms of white sugar, 

- 

in the  1998/99 marketing year: ECU 4.66 per  100 kilograms of white sugar, 

- 

in the  1999/2000 marketing year: ECU 3.11 per  100 kilograms of white sugar, 

- 

in the 2000/01 marketing year: ECU  1.55 per  100 kilograms of white sugar. 

3. 

Portugal  shall  notify  the  Commission,  in  respect  of  each  marketing  year,  of  the 

measures taken to apply paragraphs  1  and 2. 

Article 2 

With  effect  from  the  2001/02  marketing  year,  the  aid  referred  to  in  Article  1 and  the  aids 

referred to in Article 46 of Council Regulation (EEC) No  1785/81 are hereby abolished. 

Article 3 

This Regulation  shall  enter  into  force  on the third  day  following  its publication  in the  Official 

Journal  of the European  Communities. 

Article  1 shall apply from  1  July  1997. 

This Regulation shall be binding in its entirety and directly applicable in all Member States. 

Done at 

, 

For the Council 

FINANCIAL STATEMENT 

BUDGET HEADING: 

APPROPRIATIONS: 
ECU 

TITLE: 

Proposal for a Council Regulation authorizing Portugal to grant aid to sugar beet producers and abolishing all such aid from the 2001/2002 
marketing year. 

LEGAL BASIS: Articles 42 and 43 of Treaty. 

AIMS: 

There is foreseen, firstly  an authorization for Portugal to grant a degressive national aid over the 4 marketing years from 1997/98 to 
2000/2001 for  the cultivation of Portuguese sugar beet. 

Secondly, there is the proposal to bring to an end, from the 2001/2002 marketing year onwards, all of the authorizations for national aids 
in the sugar sector contained in Article 46 of the basic sectoral Regulation (EEC) No  1785/81. 

FINANCIAL IMPLICATIONS: 

PERIOD OF 12 MONTHS 

CURRENT FINANCIAL YEAR 
(97) 

(ECU million) 

(ECU million) 

FOLLOWING 
FINANCIAL YEAR 
(98) 
(ECU million) 

EXPENDITURE 
-CHARGED TO THE EC 
BUDGET 

(REFUNDS/INTERVENTION) 
- NATIONAL AUTHORITIES 

5.0. 

5.1. 

5.2. 

METHOD OF CALCULATION: 

1999 

2000 

2001 

2002 

6.0. 

CAN THE PROJECT BE FINANCED FROM APPROPRIATIONS ENTERED IN THE 
RELEVANT CHAPTER OF THE CURRENT BUDGET ? 

6.1. 

CAN THE PROJECT BE FINANCED BY TRANSFER BETWEEN CHAPTERS OF THE 
CURRENT BUDGET? 

6.2. 

WILL A SUPPLEMENTARY BUDGET BE NECESSARY? 

6.3. 

WILL FUTURE BUDGET APPROPRIATIONS BE NECESSARY? 

OBSERVATIONS 

The proposal consists of national aid for Portugal without financial  implications for the budget. 

YES/NO 

vpg/MO 

YES/NO 

Vpo/KTQ 

ISSN 0254-1475 

COM(97) 412  final 

DOCUMENTS 

EN 

03  13 

Catalogue  number  :  CB-C0-97-417-EN-C 

ISBN  92-78-23667-5 

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