Sugar CMO Briefing Feb 2013

On the 23rd January 2013 the agricultural committee of the European Parliament voted in favour of the draft compromise amendment presented to the committee by the lead rapporteur, M. Dantin. The NFU support this outcome of the committee vote and are pleased that the following key issues are recognised by the amendment.

  1. The continuation of quotas until the 2019/20 marketing year.
    • Needed to provide time for the industry to adapt from the contractionist policy course set under the last CMO reform in 2006, which resulted in significant upheaval in the beet sector, while also providing important clarity for all of when the regime will cease.
  2. The continuation of provisions allowing growers the right to be represented in contractual negotiations by a single body
  3. To provide balance in the supply chain (see further explanation below)
  4. Fairness between each sector, with the continuation of the preferential access provisions in the cane sector while quotas are in place
    • Continuing duty-free and quota-free access to ACP/LDCs for raw and white sugar supplied to the EU
    • Maintenance of a 3 month exclusive access for up to 2.5 million tonnes of raw cane sugar for the first three months of each marketing year for refiners
  5. Temporary market management measures based on consideration of all imports
    • To provide important reassurance for consumers that market shortfalls will be addressed after consideration of total white and raw sugar imports rather than the subsection of just raw sugar.
    • Will ensure that ACP/LDC countries whom have invested in the production of refining of sugar will not be undermined in the market.
    • Introduction of equivalent terms of access for beet and cane sectors when market management is used to correct shortfalls

Interprofessional Agreements: providing a vital balance

The Commission proposals on the CMO, released in October 2011, significantly weaken provisions which are in place to provide balance in European beet supply chains, which is characterised by a fragmented grower base which is unable to choose to whom and where to deliver, and highly concentrated processors.

The NFU are calling for the continuation of the right for farmers to be represented by a single body on purchase and delivery terms under an inter-professional agreement in order to ensure current balance is retained and to avoid growers being placed in an unfair market situation. This is of particular importance in the UK in particular where growers face a single processor.

The Commission proposals by weakening these provisions would also remove the ability for growers representative bodies to also supervise sampling and testing operations to ensure they are in line with agreed procedures which provides important reassurance to growers that agreements are fairly enforced in the supply chain.

Inter-professional agreements by providing for representation under one body on price and delivery terms as well as supervision of the operations provides the vital balance needed to ensure fairness in the sugar chain, which due to the unique characteristics of the chain (single processor) and the unique characteristics of the crop (beet cannot be stored for long periods of time nor transported efficiently over distance) requires growers to have additional protections to those offered under producer organisations.

Last edited on: 14:02:2013

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