Sir,
I am writing to address my concerns regarding a recent article by Philip Case highlighting my criticism of Defra minister Jim Paice over the sugar reforms.
Philip attributes quotes to me that are correct, but in clarifying my comments using the word “quotas”, gets this completely wrong. Therefore, I feel it necessary to outline the NFU position regarding the EU sugar CMO reform.
The NFU is rejecting Defra’s insistence on linking the relaxation of import tariffs to the CAP reform, as trade rules are not on the CAP agenda. We believe that Defra is at risk of isolating themselves to the rest of the EU by trying to make that connection, which no-one else is making.
We also believe that ending quotas in 2015 comes too soon after previous reforms. Radical reform of the EU sugar sector took place in 2006 and was implemented over a 4-year period. This was designed to encourage the sector to become more market orientated, by removing inefficient production and improving the efficiency of remaining industries, like the UK, while also providing import opportunities for developing countries.
The UK industry supported the reform and restructured its grower base, rationalised factory operations, at the same time investing in energy efficiency (£30 million since 2006) and improved processing operations. A restructuring scheme was introduced to incentivise inefficient industries to rationalise or close down. However, this did not work as well as expected and in 2008 the process was modified so that even efficient industries like the UK's had to downsize.
Therefore, in simplistic terms the removal of EU quotas in 2015 means that the EU, and the UK, can produce as much sugar beet as they can, or indeed want to. However, having downsized in response to the last reform, despite being efficient, the UK industry needs a period of stability and time to adjust to a more expansionist policy. The UK industry requires a reasonable transition to take the sugar sector to 2020, to enable efficient industries like ours to re-build capacity and further increase global competitiveness
William Martin
NFU sugar board chairman
Agriculture House
Stoneleigh Park
Warwickshire
CV8 2TZ
02476 858 686
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