Press Release: Sugar reform: Commission proposes to improve sugar restructuring scheme

The European Commission has proposed changes to the sugar restructuring scheme aimed at making it more effective and thus reducing European Union sugar production to sustainable levels. The restructuring scheme was a key element of the 2006 reform of the Common Market Organisation for sugar, offering producers who would be uncompetitive at the new lower price a financial incentive to leave the sector. Unfortunately, much less quota has been renounced during the first two years of the scheme than anticipated and changes therefore have to be made to make it more attractive. The main changes proposed are that the percentage of the aid given to growers and machinery contractors should be fixed at 10 percent, but growers who renounce quota will get an additional payment, paid retroactively to avoid penalising those who have already given up their quotas. A new element is that beet growers could apply directly for aid from the restructuring fund, up to a certain limit. As an additional incentive for companies to participate, those which renounce a certain amount of their quota in 2008/09 will be exempted from paying the restructuring levy on the part of their quota which was subject to preventive withdrawal in the 2007/2008 marketing year. The Commission believes that the changes proposed should allow the renunciation of about 3.8 million tonnes of sugar quota in addition to the 2.2 million tonnes given up so far. If insufficient quota has been renounced by 2010, the Commission also proposes that the level of compulsory quota cut would vary depending on how much quota each Member State had renounced under the restructuring scheme. The Commission hopes that the Council and Parliament can adopt the proposal by October 2007 at the latest.