European Parliament legislative resolution on the proposal for a Council regulation establishing a temporary scheme for the restructuring of the sugar industry in the European Community and amending Regulation (EC) No 1258/1999 on the financing of the common agricultural policy (COM(2005)0263 - C6-0245/2005 - 2005/0120(CNS))
Date: 2006-01-19
Institutions: Committee on Agriculture and Rural Development, European Parliament
Subjects: EU financing, aid for restructuring, aid to agriculture, common agricultural policy, common organisation of markets, industrial restructuring, sugar, sugar industry

C 287 E/294

EN

Official Journal of the European Union

24.11.2006

Thursday, 19 January 2006

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P6_TA(2006)0025

Restructuring the sugar industry *

European Parliament legislative resolution on the proposal for a Council regulation establishing a
temporary scheme for the restructuring of the sugar industry in the European Community and
amending Regulation (EC) No 1258/1999 on the financing of the common agricultural policy
(COM(2005)0263 — C6-0245/2005 — 2005/0120(CNS))

(Consultation procedure)

The European Parliament,

— having regard to the Commission proposal to the Council (COM(2005)0263) (1),

— having regard to Article 37 of the EC Treaty, pursuant to which the Council consulted Parliament

(C6-0245/2005),

— having regard to Rule 51 of its Rules of Procedure,

— having regard to the report of the Committee on Agriculture and Rural Development and the opinions

of the Committee on Development and the Committee on International Trade (A6-0393/2005),

1. Approves the Commission proposal as amended;

2. Calls on the Commission to alter its proposal accordingly, pursuant to Article 250(2) of the EC Treaty;

3. Considers it unacceptable that the Council should have announced a political agreement on reform of
the sugar regime with far-reaching implications for the future of the industry in many Member States
without first having obtained the opinion of the European Parliament; the Council may never conclude a
final political agreement before consultation of the European Parliament has been completed;

(1) Not yet published in OJ.

24.11.2006

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Official Journal of the European Union

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4. Calls on the Council to notify Parliament if it intends to depart from the text approved by Parliament;

Thursday, 19 January 2006

5. Asks the Council to consult Parliament again if it intends to amend the Commission proposal substan-
tially;

6.

Instructs its President to forward its position to the Council and Commission.

TEXT PROPOSED
BY THE COMMISSION

AMENDMENTS
BY PARLIAMENT

Amendment 1

Recital 1

(1) Due to developments within the Community and at
international level the sugar industry in the Community is
faced with structural problems which could seriously put at
stake the competitiveness and even the viability of the
industry as a whole. These problems cannot be addressed
effectively by using the market management instruments as
provided for in the common market organisation (CMO) for
sugar. To bring the Community system of sugar production
and trading in line with international requirements and ensure
its competitiveness in the future it is necessary to launch a
profound restructuring process leading to a significant reduc-
tion of unprofitable production capacity in the Community.
To this end, as a precondition for the implementation of a
functioning new common market organisation for sugar a
separate and autonomous temporary scheme for the restruc-
turing of the sugar industry in the Community should be
established. Under this scheme quotas should be reduced in a
manner that takes account of the legitimate interests of the
sugar industry, sugar beet and chicory growers and consumers
in the Community.

(1)
To bring the Community system of sugar production
and trading in line with international requirements and ensure
the competitiveness and viability of sugar-producing regions
in the future it is necessary to launch a restructuring process
leading to a reduction of production capacity in the Com-
munity and the creation of new sources of income in the
regions concerned. This restructuring process must allow
those who so wish to leave the system on decent terms by
means of voluntary abandoning of production involving the
permanent abolition of their quotas in exchange for fair
financial compensation. To this end, as a precondition for the
implementation of a functioning new common market organi-
sation for
temporary
sugar a separate and autonomous
scheme for the restructuring of the sugar industry in the Com-
munity should be established. The reduction in Community
production capacity, which should come about through the
implementation of such a scheme, must be no greater than
that which is strictly required and must be carried out with
due regard to the legitimate interests of the sugar industry,
sugar beet and chicory growers and consumers in the Com-
munity. Furthermore,
the restructuring scheme must be
implemented in partnership and consultation with all stake-
holders involved in the process, including farmers, proces-
sors, industry employees and public authorities.

Amendment 2

Recital 4 a (new)

(4a) Moreover, in order to ensure that the restructuring
process can be fully financed,
that all
proceeds resulting from the transfer of one million tonnes of
sugar additional to the quota be paid back into the restruc-
turing fund.

is important

it

C 287 E/296

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Official Journal of the European Union

24.11.2006

Thursday, 19 January 2006

TEXT PROPOSED
BY THE COMMISSION

AMENDMENTS
BY PARLIAMENT

Amendment 3

Recital 5

(5)
An important economic incentive for sugar undertak-
ings with the lowest productivity to give up their quota
production in the form of an adequate restructuring aid
during a limited period should be introduced. To this effect, a
restructuring aid should be set up that creates an incentive to
abandon production and renounce the quotas concerned, at
the same time allowing to take into due account the respect
of social and environmental commitments linked to the
abandon of production. The aid should be available during
four marketing years with the aim to reduce production to the
extent necessary to reach a balanced market situation in the
Community.

(5)
An important economic incentive for sugar undertak-
ings wishing to give up their quota production in the form of
an adequate restructuring aid during a limited period should
be introduced. To this effect, a restructuring aid should be set
up that creates an incentive to abandon production and
renounce the quotas concerned, at the same time allowing
economic alternatives
the regions
concerned, whilst taking into due account the respect of
social and environmental commitments linked to the aban-
doning of production, such as the protection of sugar produ-
cers' employees and farmers. The aid should be available
during four marketing years with the aim to reduce produc-
tion to the extent necessary to reach a balanced market situa-
tion in the Community.

to be developed for

Amendment 4

Recital 5 a (new)

(5a) Abandoning of production will automatically go
hand in hand with the abandoning of delivery rights enjoyed
by growers. It will have a detrimental effect on farmers'
investments, particularly as regards the specific material
required for farming sugar beet and chicory. To ensure a
dynamic restructuring process, such producers should also be
allowed to benefit from the sector's restructuring aid. There-
fore, a share of at least 50 % of the restructuring aid should
be granted to sugar beet and chicory growers in order to
offset the resulting loss of capital. Furthermore, the alloca-
tion of restructuring aid to growers and producers should be
conditional on the signing of an agreement within the trade.

Amendment 5

Recital 6 a (new)

(6a)
Bioethanol production is a way of contributing to the
objective of complying with Directive 2003/30/EC of the
European Parliament and of the Council of 8 May 2003 on
the promotion of the use of biofuels or other renewable fuels
for transport (1) and the commitments made in the Kyoto
Protocol while at the same time curtailing the production of
greenhouse gases. This is an important asset from the point
of view of diversification of energy sources and it offers new
openings which could replace the sugar industry in the Euro-
pean Union. In order to foster its development, sugar compa-
nies taking part in the temporary restructuring scheme
should not have to destroy their facilities if they are to be
reconverted into bioethanol distilleries.

(1) OJ L 123, 17.5.2003, p. 42.

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Official Journal of the European Union

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TEXT PROPOSED
BY THE COMMISSION

Thursday, 19 January 2006

AMENDMENTS
BY PARLIAMENT

Amendment 6

Article 2 a (new)

Article 2a

Support measures for employees in sugar farming and the
sugar industry

As a consequence of reduced market support in the sugar
sector, the restructuring aid also needs to be used to finance
support measures for employees in sugar farming as well in
the sugar industry. Those measures must be such as to help
them to find new opportunities.

Amendment 7

Article 3, paragraph 1, first subparagraph

Any undertaking producing sugar, isoglucose or inuline
1.
syrup to which a quota has been allocated prior to the appli-
cation of this Regulation shall be entitled to a restructuring
aid per tonne of quota renounced, provided that it abandons
production during one of the marketing years 2006/2007,
2007/2008, 2008/2009 and 2009/2010. Abandonment of
production during the marketing year 2005/2006 shall be
deemed to have
year
2006/2007.

in the marketing

taken place

Any undertaking producing sugar, isoglucose or inuline
1.
syrup to which a quota has been allocated prior to the appli-
cation of this Regulation shall be entitled to a restructuring
aid per tonne of quota renounced, provided that it totally or
partially abandons production during one of the marketing
years 2006/2007, 2007/2008, 2008/2009 and 2009/2010
and develops alternative economic activities in the region.
Total or partial abandonment of production during the
marketing year 2005/2006 shall be deemed to have taken
place in the marketing year 2006/2007.

Amendment 8

Article 3, paragraph 1 a (new)

1a.
The quotas allocated for isoglucose under Article 9 of
Council Regulation (EC) No …/… of … on the common
organisation of the markets in the sugar sector shall not be
eligible for restructuring aid.

Amendment 9

Article 3, paragraph 2

2.

Abandonment of production shall require:

Abandonment of production, on which access to the

2.
restructuring scheme is dependent, shall require:

(a) the renunciation of the relevant quota after consultations
to be conducted in the framework of the relevant agree-
ments within the trade,

(a) the renunciation of the relevant quota after consultations
to be conducted in the framework of the relevant agree-
ments within the trade;
in the absence of agreements
within the trade, the Member State in question shall
take the necessary measures to protect the interests of
the parties concerned,

(b) the definitive and total stop of production in at least one

(b) the definitive and total stop of production in at least one

factory,

factory,

C 287 E/298

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Official Journal of the European Union

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Thursday, 19 January 2006

TEXT PROPOSED
BY THE COMMISSION

AMENDMENTS
BY PARLIAMENT

(c) the closure of the factory or the factories concerned and
the dismantling of the production facilities thereof, and

(c) the closure of the factory or the factories concerned and

the dismantling of the production facilities thereof,

(d) the restoring of the good environmental conditions of the
factory site and the facilitation of redeployment of the
workforce.

(d) the restoring of the good environmental conditions of the
factory site and the opening up of economic prospects for
the region and the creation of jobs, in particular through
the possible conversion of the premises for social or
cultural purposes,

(da) the implementation of measures,

to be defined in
agreements between undertakings, with trade union
involvement and pursuant to national law, to facilitate
the redeployment of
to provide
compensation for job losses suffered by employees of
the undertakings concerned,

the workforce or

(db) the signing of an agreement within the trade concluded
with sugar beet and chicory growers or their official
representatives concerning the share of restructuring
aid to be allocated to growers, and

(dc) the submission of a restructuring plan and its approval
by the relevant authorities of
the Member State
concerned. This agreement shall be signed inter alia by
sugar beet and chicory growers, as regards their aid
entitlements, and by employees of sugar factories, as
regards labour-related matters.

Amendment 10

Article 3, paragraph 2 a (new)

2a. Where industrial facilities are to be converted to
produce bioethanol for energy purposes, the abandonment of
production shall require:

(a) the renunciation of the relevant quota after consulta-
tions to be conducted in the framework of the relevant
agreements within the trade,

(b) the conversion of industrial facilities into distilleries
for
enabling the effective production of bioethanol
energy purposes,

(c) the implementation of measures, to be defined in agree-
ments between undertakings and without prejudice to
national legislation, to facilitate the redeployment of the
workforce or to provide compensation for job losses
suffered by employees of the factories concerned,

(d) the signing of an agreement within the trade concluded
with sugar beet and chicory growers or their official
representatives concerning the share of restructuring aid
to be allocated to growers, and

(e) the submission of a restructuring plan and its approval
the Member State

relevant authorities of

by the
concerned.

24.11.2006

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Official Journal of the European Union

C 287 E/299

TEXT PROPOSED
BY THE COMMISSION

Thursday, 19 January 2006

AMENDMENTS
BY PARLIAMENT

Amendment 11

Article 3, paragraph 3

3.
Applications for restructuring aid shall be submitted to
the Member State by 31 January of the year preceding the
marketing year during which the production is to be aban-
doned at the latest. However, applications shall be submitted
by 31 July 2006 at the latest for production to be abandoned
in the marketing year 2006/2007.

3.
Applications for restructuring aid shall be submitted to
the Member State and approved by the Commission by
31 January of the year preceding the marketing year during
the latest.
which the production is to be abandoned at
However, applications shall be submitted by 31 July 2006 at
the latest for production to be abandoned in the marketing
year 2006/2007.

Applications for restructuring aid shall include:

Applications for restructuring aid shall include:

(a) a commitment to renounce the relevant quota;

(a) a joint commitment within the trade to renounce the rele-

vant quota;

(b) a commitment to abandon definitively and totally produc-
tion in at least one factory during the marketing year
concerned. The marketing year 2006/2007 shall be
deemed to be the following marketing year for applica-
tions submitted before 1 August 2006;

(b) a commitment to abandon definitively and totally produc-
tion in at least one factory during the marketing year
concerned. The marketing year 2006/2007 shall be
deemed to be the following marketing year for applica-
tions submitted before 1 August 2006;

(c) a commitment to meet the requirements provided for in
paragraphs 2(c) and (d) within a period of time to be
determined by the Member State.

(c) a commitment to meet the requirements provided for in
paragraphs 2(c), (d), (da), (db) and (dc) within a period of
time to be determined by the Member State;

The respect of these commitments shall be subject to a deci-
sion granting the aid as referred to in paragraph 7.

(ca) the drawing-up of a business development plan
covering planned economic activity and the impact of
restructuring on the environment and employment and
taking due account of the situation in the region.

However, where industrial facilities are to be recon-
verted to produce bioethanol for energy purposes, appli-
cations for restructuring aid shall include the commit-
ment to meet only the requirements laid down in para-
graph 2a.

These commitments shall be notified to the Commission and
shall be implemented on the territory of the Member State
concerned. The decision granting restructuring aid as referred
to in paragraph 7 shall be conditional upon these commit-
ments being met.

Amendment 22

Article 3, paragraph 3 a (new)

3a.
The application submitted by the undertaking shall
contain a detailed restructuring plan drawn up by the under-
taking, together with a detailed statement of the underta-
king's commitments and a schedule for the fulfilment of
those commitments.

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24.11.2006

Thursday, 19 January 2006

TEXT PROPOSED
BY THE COMMISSION

AMENDMENTS
BY PARLIAMENT

Amendment 12

Article 3, paragraph 4

4.
Restructuring aid shall be granted exclusively for the
marketing year during which the production is abandoned in
accordance with paragraph 2(b).

4.
Restructuring aid shall be granted exclusively for the
marketing year during which the production is abandoned in
accordance with the requirements laid down in paragraph 2
or, where industrial
facilities are to be reconverted to
produce bioethanol for energy purposes, with the require-
ments laid down in paragraph 2a.

Aid shall be granted without prejudice to other incentive
measures aimed at encouraging the development of bioener-
gies.

Amendment 13

Article 3, paragraph 5

The amount of restructuring aid per tonne of renounced

5.
quota shall be set at:

— 730 Euro for the marketing year 2006/2007,

— 625 Euro for the marketing year 2007/2008,

— 520 Euro for the marketing year 2008/2009,

— 420 Euro for the marketing year 2009/2010.

5. The amount of restructuring aid per tonne of renounced

quota shall be set at:

— 800 Euro for the marketing year 2006/2007,

— 741 Euro for the marketing year 2007/2008,

— 622 Euro for the marketing year 2008/2009,

— 516 Euro for the marketing year 2009/2010.

Amendment 14

Article 3, paragraph 5 a (new)

5a.
At least 50 % of the total amount per tonne of quota
renounced and made available to the sugar industry for
restructuring shall be for sugar beet and chicory growers.

The Commission is called upon to draw up proposals on the
use that might be made of the amount received by growers
having ceased production under the restructuring fund
arrangements with a view to the creation of economically
appropriate alternative forms of production.

Amendment 20

Article 3 a (new)

Article 3a

Compensation

Sugar beet and chicory growers, sugar factory employees
and suppliers of machinery used in sugar beet and chicory
production will suffer losses as a result of the restructuring
and abolition of sugar beet and chicory production.

In view of this, 50 % of restructuring aid shall be reserved
for sugar beet and chicory growers and machinery suppliers
as compensation,
in particular for investments made in
specialist machinery that will decline in value.

Furthermore, an additional sum of at least 10 % of restruc-
turing aid shall be reserved as compensation for sugar
factory workers who have lost their jobs.

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C 287 E/301

TEXT PROPOSED
BY THE COMMISSION

Thursday, 19 January 2006

AMENDMENTS
BY PARLIAMENT

Amendment 21

Article 3 b (new)

Article 3b

Regional diversification

During the transitional period, the additional amount allo-
cated for each tonne of sugar not produced, equivalent to
15 % of restructuring aid, shall be earmarked for the
Member States or their regions as support for diversification
in regions affected by restructuring.

Amendment 15

Article 4, paragraph 1

1.
Sugar beet growers shall be entitled to an additional
payment, provided that they have ceased the delivery of sugar
beet to a factory that has abandoned sugar production during
the marketing year 2006/2007 in accordance with Article
3(1).

1.
Sugar beet growers and chicory growers shall be entitled
to an additional payment, provided that they have ceased the
delivery of sugar beet to a factory that has abandoned sugar
production during the marketing year 2006/2007 in accord-
ance with Article 3(1).

Amendment 17

Article 4 a (new)

Article 4 a

Transitional aid for sugar beet growers

Sugar beet growers who continue sugar beet production in
Member States which significantly reduce their sugar quota
shall have access to transitional national aid for five conse-
cutive years starting with the marketing year 2006/07 at
the earliest and ending by the marketing year 2013/14 at
the latest.

Amendment 16

Article 6, paragraph 1, subparagraph 2

Quotas that have been renounced by an undertaking during a
given marketing year in accordance with Article 3(2)(a) shall
not be subject to the payment of a temporary restructuring
amount for the marketing year concerned and subsequent
marketing years.

Quotas that have been renounced by an undertaking during a
given marketing year in accordance with Article 3(2)(a) and
(2a)(a) shall not be subject to the payment of a temporary
restructuring amount for the marketing year concerned and
subsequent marketing years.