EU agrees cut in sugar subsidies

European Union agriculture ministers today reached political agreement on a wide-ranging reform of the Common Market Organisation for sugar, based on the proposal tabled by the European Commission in June. The reform will enhance the competitiveness and market-orientation of the EU sugar sector, guarantee it a viable long-term future and strengthen the EU’s negotiating position in the current round of world trade talks. It will bring a system, which has remained largely unchanged for almost 40 years, into line with the rest of the reformed Common Agricultural Policy. The guaranteed price for white sugar will be cut by 36 percent over 4 years; farmers will be compensated for, on average, 64.2 percent of the price cut through a decoupled payment - which will be linked to the respect of environmental and land management standards and added to the Single Farm Payment; countries which give up more than half of their production quota will be entitled to pay an additional coupled payment of 30 percent of the income loss for a temporary period of five years; a generous voluntary restructuring scheme will be established to provide incentives for less competitive producers to leave the sector; intervention buying of surplus production will be phased out after four years. Developing countries will continue to enjoy preferential access to the EU market at attractive prices. Those ACP countries which need it will be eligible for an assistance plan worth € 40 million for 2006, which will pave the way for further assistance.

European Commission: Press Release: IP/05/1473 http://europa.eu/rapid/pressReleasesAction.do?reference=IP/05/1473&format=HTML&aged=0&language=EN&guiLanguage=en

BBC News, 25.11.05: Sugar firms welcome subsidy deal http://news.bbc.co.uk/1/hi/business/4469138.stm

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