Reform of EU Sugar Regime Progresses
Date: 26.02.2008The latest reform of the European sugar regime in October 2007, with the aim of reducing the European sugar production quota by six million tonnes, is taking effect. In line with expectations, the incentives to return quotas, such as the higher compensation for farmers and the waiving of the restructuring levy for the preventive withdrawal in the 2007|08 sugar marketing year, are leading to increased renunciations of sugar quotas.
As a consequence of the sugar regime reform, around 2.2 millions tonnes of quotas for the 2007|08 sugar marketing year have already been renounced. In the period to 31 January 2008, approximately a further 2.6 million tonnes of permanent renunciations were reported in the so-called first wave. Only approximately another 1.2 million tonnes are therefore needed to meet the reform target of six million tonnes before the Final Cut in the 2009|10 sugar marketing year.
The second wave for the 2008|09 marketing year, in the period to 31 March 2008, allows producers who have taken advantage of the first period to renounce further quotas. However, the voluntary renunciations in the second period no longer entail any waiving of the restructuring levy.
In the course of the first period, AGRANA renounced 13.5% of its Austrian quota and 10% of its sugar quota in Slovakia. In conjunction with the closure of the plant in Petöhaza, the Group returned approximately 30% of its quota in Hungary. In the Czech Republic and Romania no voluntary returns were made during the first period.
EU Agriculture Commissioner Mariann Fischer Boel announced today that there would be no preventive withdrawal, i.e. no anticipatory, flexible reduction in quotas, for the 2008|09 sugar marketing year. This is regrettable in as far as this step would certainly have accelerated the attainment of the reform target.
AGRANA appreciates the announcement of the European Commission to make use of the flexibility permitted by the WTO in terms of subsidised sugar export quotas as this measure will help to balance the market.