Reforming regime leaves a bad taste in the mouth

Date: 17/06/1999

By René Cordes

THE EU introduced a common regime for the sugar industry in 1968 to protect what has traditionally been regarded as a precious commodity.

“This dates back to the organisation of the Community and it touches a nerve,” said Philip Woolfson, a competition lawyer in Brussels who works closely with the industry and remembers the sugar shortage in the UK in the 1970s, when he was a teenager.

Under the regime, which has only been modified in minor ways over the years, 'intervention' prices are fixed for sugar beets and sugar every year. This is the price which member states are required to pay for raw or white sugar.

The Union also fixes production quotas each year for all member states, setting limits on the amount of sugar which may be produced and sold directly to other EU countries or the rest of the world. Member states then allocate quotas to their sugar processors, who in turn allocate them to farmers in the form of contracts. The current regime is due to expire in 2001.

Acting Agriculture Commissioner Franz Fischler said last week that the institution believed it was still too early to think about reforming the regime, but added that it might consider cutting intervention prices next year.

Sugar production in the EU

^*Excluding former eastern German factories

Source: Comité Européen des Fabricants de Sucre (CEFS)