Lobbying intensifies ahead of vote on sugar quotas

EU sugar production quotas are scheduled to end in 2015.

A lobbying campaign by the food and drink industry and by farmers’ groups is under way in the European Parliament ahead of a plenary vote next week (13 March) on sugar quotas.

Under an agreement reached in 2006, EU sugar production quotas are scheduled to end in 2015. Set up in 1968, quotas guarantee a minimum price for beet producers. The European Commission wants to get rid of the quotas as part of its plans to reform the Common Agricultural Policy (CAP) for 2014-20.

But, after lobbying from farmers’ groups and the sugar industry group Comité Européen des Fabricants de Sucre (CEFS), the Parliament’s agriculture committee voted in January to extend the quotas until 2020.

Johann Marihart, the president of CEFS, said that the industry needs more time before the quota ends, and says that jobs would be at risk if the quotas end in 2015.

Dramatic effect

But food companies claim that the quotas have had a dramatic effect on sugar prices, with white sugar prices in the EU now 50% higher than on the global market. A coalition of 27 confectionery groups and beverage companies have written an open letter to MEPs asking them to overrule the agriculture committee in next week’s vote on CAP reform. “The fundamental EU objectives of fair competition, security of supply and reasonable prices have not been met and cannot be met until the market- distorting production quotas are abolished,” they wrote.

Even if the full Parliament supports the agriculture committee’s position, the quota extension will still face resistance from member states. Several countries – including Denmark, Italy and the UK – are opposed to the extension, but France and Spain are keen to keep the quotas until 2020.

There are other concerns within the industry about the agriculture committee’s position on import restrictions.

Processors of cane sugar say that the current rules give processors of beet sugar an unfair advantage because of restrictions on the amount of raw cane sugar that can be imported. Beet sugar producers currently control around 80% of the market.

“We are very concerned that the quotas issue is monopolising the entire debate,” said Laura Giro, executive director of the European Sugar Refineries Association. “If you want three producers to compete on the same playing-field, you need to give them equal treatment with similar access to raw materials.”

The original intention of the import restrictions put in place in 2006 was to allow developing countries to fill the gap by increasing their exports of sugar cane. However this has not happened, forcing sugar refiners to turn to Brazil and Thailand for the raw cane, where sugar is subject to expensive tariffs. The EU has been using exceptional measures each year to try to alleviate the situation, but cane sugar refiners want a permanent solution to the problem. A group of MEPs has put forward an

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amendment as part of next week’s vote that would guarantee a fixed amount of imports for cane.