EU agriculture ministers approve changes to sugar restructuring scheme
The European Union agriculture ministers on Wednesday approved changes to the sugar restructuring scheme that will reduce sugar production in the EU to sustainable levels.
The restructuring scheme was a key element of the 2006 reform of the Common Market Organization for sugar, offering producers who would be uncompetitive at the new lower price a financial incentive to leave the sector. However, much less quota was renounced during the first two years of the scheme than anticipated and changes had to be made to make it more attractive.
The main changes approved Wednesday by the ministers, who are meeting in Brussels, are as follows:
*The percentage of the aid given to growers and machinery contractors should be fixed at 10%, but growers who renounce quota will get an additional payment. For the 2008/2009 marketing year, growers will receive an additional payment of €237.5 ($325) for each ton of quota renounced.
*Beet growers will be allowed to ask directly to renounce quota, up to a limit of 10% of a factory’s quota.
*A two step application for renouncing quota for 2008/09. In the first step companies must first renounce at least as much quota as specified in the preventive withdrawal decided in March this year in order to be able to participate in the second step. Companies will know after the first step how much they risk their quotas being cut in 2010 if they do not participate in the second step.
*The formula for the final quota cut proposes a large deduction of quota at the company level with a view to encouraging companies to participate in the voluntary restructuring scheme.
The European Commission has said it believes that the changes should allow the renunciation of about 3.8 million tons of sugar quota in addition to the 2.2 million tons given up so far. If insufficient quota has been renounced by 2010, the Commission will make compulsory quota cuts. The level of these cuts will vary depending on how much quota each EU member state has renounced under the restructuring scheme. European Commissioner for Agriculture and Rural Development, Mariann Fischer Boel, expressed her delight that the ministers had approved these vital changes to the restructuring fund. “It is a key element of our reform, offering financial incentives to factories which can’t compete at the new lower prices. I believe that the changes agreed today will encourage many more companies to give up quota. I urge them to take this chance,” she said. (people.com.cn)
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