Reform of the market in 2006
The European sugar market was reformed in 2006. The main objectives were to reduce European sugar prices to bring them more into line with those on the world market, to create a smaller and more competitive industry, to provide access to the least developed countries and to comply with the rules of the World Trade Organization (WTO).
The reforms had an enormous impact on the European sugar industry and led to a radical shake-up. EU sugar production has been reduced from 19 million to 13 million tonnes. Of the 310,000 sugar beet growers, 140,000 have ceased production, reducing the area under cultivation by 750,000 hectares. Of the 189 European sugar factories, 82 have been closed and five EU countries have stopped sugar manufacturing entirely, and thus sugar beet cultivation, too. The Netherlands has also come through a sweeping efficiency drive. Royal Cosun acquired CSM suiker BV and three of the five Dutch sugar factories were closed.
The European Commission, the European Parliament and the European Court of Auditors have concluded that the EU has achieved its objectives for the sugar market. The current system complies with the WTO regulations, is compatible with the common agricultural policy and agrees with the Everything But Arms initiative. Europe has transformed itself from a net sugar exporter into a net sugar importer. The European sugar industry is significantly more competitive and the current system is budget neutral to European taxpayers. The sugar industry also thinks all the EU objectives have been met. Sugar exports have been curbed and refunds are no longer available for quota sugar exports. The EU can export up to 1.374 million tonnes of surplus sugar and has abolished subsidies and export refunds. The system therefore complies with the WTO regulations. The current sugar market organisation took effect on 1 July 2006 and will remain in place until 30 September 2015.
Brussels presents new agricultural policy
On 12 October 2011, the European commissioner for agriculture, Dacian Ciolos, presented a new agricultural policy for 2014-2020. The European Commission's proposals include the termination of sugar quotas in September 2015. The European Parliament had voted in June 2011, however, to retain the sugar schemes until at least 2020. The European Parliament, like the industry, thinks the industry needs until at least 2020 to come to terms with the abolition of sugar quotas.
The European Parliament and the 27 member states will review the European Commission's proposals in the coming months. Suiker Unie is playing an active role in the dialogue on the future of the sugar market. Our main message is that the sugar industry has just come through a sweeping reorganisation that will not be completed until the end of 2011. The industry is in balance. There is no need for more reforms now; the current market organisation seems to be a clear and effective instrument to achieve the common agricultural policy's goals of food security and stability. Now that the industry has come through a successful reform, it is time to give the new system a chance to prove itself.
Click here to read the position paper prepared by the Dutch sugar industry.