Restructuring of the sugar industry - Common organisation of the markets in the sugar sector (debate) 
President
The next item is the joint debate on
the report by Katerina Batzeli, on behalf of the Committee on Agriculture and Rural Development on the restructuring of the sugar industry - C6-0176/2007 -, and
the report by Katerina Batzeli, on behalf of the Committee on Agriculture and Rural Development, on the common organisation of the markets in the sugar sector - C6-0177/2007 -.
Mariann Fischer Boel
Member of the Commission. - Mr President, let me start by thanking Ms Batzeli and the members of the Committee on Agriculture and Rural Development for all the work they have carried out on this proposal. I will now start to place the proposal into its context.
As you know, the restructuring fund did not fulfil our expectations during the second year of the restructuring period, after actually quite a promising first year.
As you might remember, we were expecting about 1.5 million tonnes of quota to be renounced in the first year and more than 3 million tonnes in the second year. In reality, the total renunciation in the first two years amounted to only 2.2 million tonnes against an expected 4.5 million tonnes.
I am still convinced that the restructuring fund is a good instrument as such, which should be strengthened and improved, taking into account the experiences that we have had up to now.
Concerning the proposal we are to discuss today, let me make it clear that we are not in a process of renegotiating the sugar reform from 2005. In light of the insufficient take-up under the restructuring fund over the first two years of its operation, the objective is to make a success out of it for the last two years. Otherwise the final uncompensated cut of the quotas will kick in in 2010.
This proposal aims to make a very attractive offer to those undertakings and to those growers that want to give up quota production in the marketing year 2008/09, while in principle keeping unchanged the conditions for the last year of the restructuring period. For the first time, growers will be able to trigger the restructuring process, but only up to a limit of 10% of the quota belonging to an undertaking. The percentage of the restructuring aid reserved for growers will be fixed at 10% and this payment will be then supplemented by a top-up of EUR 237.5 per tonne of sugar quota and this sums up altogether to EUR 300 per tonne.
I think this is a very interesting offer for the growers and I do not see any need to go further. That is why I will not be in a position to support the amendments in the report on the restructuring fund that asks for changes in the amounts paid, for example 6, 7 and 12, or in the percentage that goes to the farmers: namely, amendment 8.
An element of retroactivity will ensure that those undertakings and those sugar beet producers who have already taken part in the restructuring scheme up till now have not been or will not be disadvantaged by having done so.
As requested in amendment 9, the eligibility of inulin syrup producers and chicory growers for retroactive payments will be explicitly mentioned in the final text. Moreover, undertakings that will be restructured in the marketing or growing year 2008/09 could be exempted from the restructuring levy applied to the quantity subject to the 2007/08 preventive withdrawal, provided that they renounce their quota accordingly. And, last but not least, as an additional incentive for undertakings, their individual restructuring effort will be taken into account in case of an obligatory final quota cut.
In order to make it easier to reach a market balance during the restructuring period, it is proposed to make the preventive withdrawal a permanent tool, not only during the restructuring period, exactly as is proposed by Ms Batzeli in her report.
The proposed draft regulations aim to create a secure environment and to remove existing blockages from the system. All these improvements should make the fund a success in the third year, without changing the common market organisation for sugar on the basis of the reform that we agreed in 2005. The measures proposed are balanced to create strong incentives for all parties that are involved in the restructuring process.
I want to thank you for your good cooperation, which makes it possible for us to adhere to the tight schedule that we have to work under and to have this much more efficient system in place for the marketing year 2008/09. I am aware that the fund must be improved to achieve its aim and, if this is not possible, I am quite sure that there will be no winners. There will only be losers and, therefore, I have been very grateful for the support that I have met from the Agriculture Committee and the Members.
Katerina Batzeli  
rapporteur. - (EL) Mr President, Commissioner, allow me first of all to remind you that in its original opinion on the Common Market Organisation (CMO) in sugar the European Parliament pointed out that the Commission's proposals ought to contribute to the essential viability of the new system and to the safeguarding of the sugar beet growers, the workers in sugar mills and areas of production, all of which will be affected by the elimination of quotas. This was our political commitment and agreement, based on which we gave our consent to the Commission.
However, the final decisions by the Council in 2005 on the review of the sugar sector could not meet these high expectations. The sector is particularly important for the equalisation of the arable crops market, the supply of European sugar and bio-ethanol factories, as well as the advancement of a new framework of policies for the modification of other CMOs under review within the context of the new CAP. The Council's decisions have seemed doomed from the outset to a short life and marginalisation because they were no more than a patchwork of national demands and complex mechanisms.
This decision and the way it is implemented at national level mean that the reduction in production to date has been no more than 2.2 million tonnes, whereas the target is approximately 6 million tonnes by 2010. I should like remind you that for any kind of reduced production after 2010 the producing regions, workers and producers will not receive any compensation from the Restructuring Fund, which is totally self-funded.
Such, then, were the important political issues occupying us in the Committee on Agriculture and Rural Development when we had to decide on the report with which you are acquainted.
Commissioner, in the Agriculture Committee we made significant improvements for the unimpeded implementation at national level of Community decisions. We did not seek radically to review the sugar CMO, and, in any case, you indicate this in your text. We did not seek to propose a multi-speed review since in many regions such as Ireland sugar production has already been reduced in part or totally abandoned.
In addition, we have considered the existing budgetary savings amounting to approximately EUR 3 million. If this money is not used, it will not be ploughed back into the sector but will fund other projects or will be paid back.
Finally, in light of the principle of proportionality and equality with regard to sugar beet growers, we must all agree with the principle of the retroactivity of the measures proposed in order not to create a climate of injustice for producers, mills and regions that have already joined the new system.
I should also like to point out that the ineffectiveness of the large degree of the Member States' flexibility and subsidiarity worries us. This flexibility has become an unofficial nationalisation of the measures: the Member States have been free to implement the new CMO as they please, bending to the pressures exerted on them by collective bodies and regional authorities. The way the Member States treat the concept and policy of flexibility ought to be a matter of concern for us in future reviews, as should the issue of how this policy is to be used within the framework of health check decisions.
Commissioner, we must now move from political questions to technical issues, which will also decide the course of the CMO review. With regard to the amendment of Regulation No 318/2006, we consider that what is required is a fairer application of the final linear quota reductions by 2010. If a straight reduction in quotas is considered necessary in 2010, our committee believes that this reduction should be conducted in two stages. During the first stage there should be a linear cut of 13.5%. During the second stage the Commission's proposal should be implemented; accordingly, the Member States and those undertakings which have renounced quotas during the restructuring regime would be exempted. The exemption will be in line with the efforts made at national level.
However, I should like to point out to the Commission and the Council, not attending the debate here today, that we must bear in mind the reduced contribution of undertakings, which have either voluntarily reduced their quotas by participating in the restructuring regime or participated in the preventative withdrawal mechanism. We propose a broader and more long-term use of preventative withdrawal, thus assisting smoother adaptation of the sector to future challenges. Since the subject of preventative withdrawal has hitherto not been found in the compromise at Council level, I should like to include it, Commissioner, if you agree.
As for the amendment of Regulation No 320/2006 on the restructuring regime, which is in any case the central aspect of the reform, my report proposes:
firstly, to increase to EUR 260 per tonne the lump sum of EUR 237 per tonne which the producers will receive. We insist on this, despite your disagreement, Commissioner, because we believe that it is a significant incentive for producers to move to the concept of a 10% voluntary renunciation;
secondly, to increase to 50% the single compensation amount for producers from restructuring aid, which is currently fixed at 10%. This increase is a political commitment by the European Parliament; it shows that the subsidies ought to go mainly to the producers. The message more political than financial;
thirdly, the compensation paid to undertakings for the production of bio-ethanol should be raised from 35% to 100%, since, in our view, a significant incentive should be given to contribute to the renewable energy sources sector;
fourthly, and of particular importance for the regions, is the maintenance of aid for diversification in the regions where mills have closed: it should remain at EUR 109.5 per tonne of reduced sugar production until the 2009-2010 period. Commissioner, we seek partly to improve funding in order to reduce the impact on the regions as well as to provide additional incentives. The review is intended not to amend some general provisions but to strengthen incentives;
fifthly, the renunciation of 10% of quotas should apply first of all to small or less competitive producers;
sixthly, restructuring aid must be increased for partial abandonment, from EUR 218.75 to EUR 625 for the 2008-2009 period. I have to admit that the rapporteur's position is particularly significant in supporting issues of this sort.
I should like to point out as rapporteur that certain proposals of the Agriculture Committee ought to be re-examined to get things in proportion. For this reason, I believe we ought to take into account funding from the Restructuring Fund and also additional funding from the European Agricultural Guidance and Guarantee Fund.
As rapporteur, I should therefore, like to endorse Amendments 27 to 30, which introduce three fundamental principles:
firstly, a retroactive measure, because producers, undertakings and regions which have complied progressively from the start of the new CMO cannot be penalised;
secondly, the amount of aid must be reasonable and acceptable to all sides (and not EUR 625 for one year);
thirdly, it is important to increase retroactively and until the end of the transitional period the amount of aid given to mills for partial abandonment of production.
In closing, allow me to express a note of warning. Negotiations the Commission is holding with the ACP countries within the framework of the EPA are ongoing. The Commission seems ready to abolish both the safety clauses with regard to the total quantities of sugar importable into the Community by each partner country and the minimum price clause for imported sugar. In addition, it is also proposed that access to the Community market should be liberalised in a similar way for the sixteen Sugar Protocol countries.
Commissioner, I believe that we are called upon to do important work here. Such decisions outside the institutional framework should be invalid: they would invalidate the political and institutional role played by the European Parliament.
László Surján  
draftsman of the opinion of the Committee on Budgets. - (HU) Thank you for the opportunity to speak, Mr President. The Committee on Budgets fundamentally supports the proposal. Let me also personally congratulate the rapporteur. It is a very difficult task under any circumstances to try to persuade growers in a given sector to cut back their production. Nor does it cast us in a very good light in the eyes of European citizens to be giving support and funding to this sort of thing.
Nevertheless, if it becomes necessary to intervene in such a way and, moreover, it has no greater impact on the overall budget of the European Union than the present arrangements, then it is appropriate that it should be better targeted and that some compensation and support should go to those who are genuinely taking action on this issue on the production side, as is happening in the present case.
It is a major problem, however, that there are cases where countries have already renounced some of their quotas, only to find that the regulations have subsequently changed. The report proposes ways of resolving this and I ask Parliament to support these in this form. Thank you for your kind attention.
Albert Deß
on behalf of the PPE-DE Group. - (DE) Mr President, Commissioner, ladies and gentlemen, I would like to give a brief review of the last reform. Many sugar beet growers are asking why a reform of this market regulation, which has stood the test of time over decades, is necessary at all. There are two main reasons why this reform was and is necessary. Firstly, it was decided a few years ago, in the wake of the arms initiative, that as from 2009 everything except arms may be supplied to Europe from the poorest countries. The sugar sector is also affected by this.
The second reason is that there is a WTO decision and we have to remove surpluses. This means that we have to take more than 6 million tonnes of sugar out of production. Commissioner, we put forward proposals to Parliament in 2005 and you have just said that the restructuring fund did not fulfil our expectations. Today I would like to say here that if the Commission and Council had followed Parliament's proposals more closely in 2005, greater volumes of sugar would probably have been renounced voluntarily.
We now have the opportunity to make corrections so that incentives are improved. I can only ask the Commission and Council to follow the proposals. I would like to thank the rapporteur, Mrs Batzeli, for the report she has submitted. The Agriculture Committee has largely followed these proposals - with minor corrections - and I am convinced that if the Commission follows these proposals, incentives will be increased to such an extent that much larger volumes of sugar will be renounced voluntarily. I should like to state, Commissioner, that there are many members of the Agriculture Committee who have listened closely to the sugar beet producers. If the requirements set out here are met, I believe that this reform will be successful.
Csaba Sándor Tabajdi
on behalf of the PSE Group. - (HU) Mrs Fischer Boel, I think Katerina Batzeli's report and Surján László's opinion are technically sound and politically very correct. Restoring balance in the market is important, and we are still a long way from being able to achieve a market balance by 2010 with regard to European sugar production and sugar beet cultivation.
I do not envy the Commission or Parliament, because it is not easy to create order and equilibrium in a distorted, excessively complicated and oversubsidised system. This sector, after all, was the beloved child of the CAP (Common Agricultural Policy) compared to other, less favoured sectors.
I fully agree on the need for counterbalancing. If we implement the additional 10% reduction, there will still be a surplus of 2.1 million tonnes in the system, and if we do not manage to deal with this by 2010 we will need to make a further reduction of 14%.
I believe it is unfair, and I would ask the Commissioner and the Commission to weigh this carefully, that those countries which have made major reductions, namely Italy, Portugal and Finland, will still have to make a further reduction of 10% along with all the others. This is not fair.
I also agree that we should do more to protect the interests of small and medium-sized growers, because the 'first-come-first-served' rule puts them at an informational disadvantage compared with the multinationals. In Hungary one factory in five has closed down. The best sugar manufacturer has ceased operating, but neither the manufacturer nor the growers have come off badly. The only thing not covered adequately in the earlier regulation was compensation to employees, I mean compensation to the employees of the sugar manufacturer.
Lastly, I think it is very important that undertakings should not have to pay the restructuring levy if they reduce their quota. There is a demand to this effect. I ask Mrs Fischer Boel to support this, as it would encourage further reductions and help restore a balance in the market. Once again, helping small and medium-sized growers is therefore very important because this has a major social impact on European sugar beet growers. Thank you for your attention.
Andrzej Tomasz Zapałowski
on behalf of the UEN group. - (PL) Mr President, the reform of the sugar production sector in its existing shape is unacceptable. It strikes primarily at beet producers and sugar factory workers. The exceptional activity shown by European concerns in buying up sugar factories in Eastern Europe prior to their accession to the EU gives rise to the suspicion that this reform was already being planned back then, with vast sums in compensation for the owners of sugar factories who will be shutting them down.
In the new Member States, during the accession period farmers invested huge sums in upgrading their farms, including beet production. Two years on it has turned out that production needs to be restricted, while the main beneficiary of the compensation for giving up sugar production will be the new owners of the sugar factories. It is estimated that in Poland alone around ten factories will be closed.
The proposed adjustments, which allocate higher sums from the restructuring fund to growers, are good. My doubts, though, arise from the support for producers who have been buying sugar factories over the last few years, because could it not just be that they have been buying them with a view to closing them profitably?
Friedrich-Wilhelm Graefe zu Baringdorf
on behalf of the Verts/ALE Group. - (DE) Mr President, Commissioner, the sugar market regulation is not a showpiece of the Commission and Council! Mr Deß has already said that if you had listened a little more to Parliament's proposals, some of the glitches would not have occurred.
When we have an instrument like the quota, we must use it and not threaten it for 2010, and then we must make flat-rate or staggered reductions and provide compensation for these. Your way of doing this through pricing came to grief because you then increased the quota by a million tonnes in one go by converting C sugar into quota sugar. Furthermore, financing by consumers by means of pricing has meant that the sugar industry has had no interest in restructuring. Export subsidies have not been radically reduced. This too would have been required.
The errors should be specified and they are not being corrected now either. The restructuring fund and restructuring aid are essentially discontinuations. The regions, trade unions and growers are against them. No diversification has been adopted, as Parliament demanded, in order to safeguard the regions' socio-ecological development. Nor are all these errors now being corrected. We are therefore remedying the wrong symptoms.
Another important point is that you now want to limit restructuring aid going to growers to 10%. It used to be that countries could fix a higher price. We are putting forward another proposal here and I hope that Parliament will implement it this time with the referral instrument, because you have not honoured the promises you made to us at the last vote, but have now gone back on them.
Diamanto Manolakou
on behalf of the GUE/NGL Group. - (EL) Mr President, the new sugar sector regulation adopted in 2006 and already being implemented is a bitter pill and it has claimed its first victims.
We, of course, voted against it and were right to do so: sugar mills have closed and many sugar beet growers have ended up unemployed. They receive paltry compensation which is intended to stifle their opposition and protests.
In my country, Greece, sugar beet cultivation used to guarantee that the people were self-sufficient in sugar; it provided many workers and farmers with work and injected economic life into neglected regions. Today, two out of five factories have closed, production has fallen by 50%, unemployment in the sector has risen, farmers have been made destitute and whole regions have been devastated.
The amendments proposed today are aimed at fully implementing the new regulation. There is to be no let up in the diminishing rate of production, fixed at a shortfall of 2.2 million tonnes and increasing to a planned shortfall of 6 million tonnes.
This means an even greater impact than we have already seen. The winners will be the food industrialists, who will import cheap sugar; the losers will be sugar industry workers, since more mills will close and further numbers of small and medium-sized sugar beet producers will be wiped out.
We oppose this and we will vote against the additional arrangements: they are hastening the completion of the basic regulation and are yet another criminal ploy in the campaign against the European sugar industry and its workers.
Hélène Goudin
on behalf of the IND/DEM Group. - (SV) Mr President, the European sugar industry is on life-support. The respirator, now the EU, each year gives millions of euros in direct aid and intervention to European sugar growers. EU taxpayers are financing an antiquated system which has seen its day. Unfortunately the Committee's proposals mean higher costs and a slower rate of reform, the direct opposite of adjustment to the market which this uncompetitive sector so badly needs.
Sugar-producing countries outside the EU must be given access to the internal market without restrictions. International trade based on fairer conditions is a means for less developed countries to compete on the global market. Liberalisation of the sugar industry would also benefit European consumers. They would avoid having to finance an artificial system of support for producers through their taxes, and they would see lower prices in the shops. This would benefit everyone.
Jean-Claude Martinez
Mr President, Commissioner, the common market organisation for sugar worked. It was cheap and offered access to our market to ACP countries.
However, during the WTO negotiations, Thailand, Australia and particularly Brazil insisted on a sugar monopoly. At the same time, to win allies during the Doha Round, Pascal Lamy, who was at the time European Commissioner for Trade, offered to abolish customs duty for the 49 least developed countries with the 'Everything but arms' programme. In 2009-2010, Europe will begin to see imports of sugar in theory from poor countries, but which was produced with Kuwaiti, Saudi or other capital, in the Sudan or elsewhere.
European beet growers and sugar producers in outermost regions must therefore be sacrificed for the benefit of Brazil and other countries, hence the 2006 reform. The same applies to cereals and milk. Soon it will apply to wine. Our producers will disappear, which in Europe is what we call 'restructuring'.
Of course, we pay cereal growers to stop growing crops: we call it 'restructuring aid', like the set-aside payment or the grubbing-up premium.
However, 18 months after this aid programme began, it is not working. Commissioner, you are giving us the same old speech about grain mountains and milk lakes. You are saying that in 2007-2008, there will be a 4 million tonne surplus, hence the two proposals today for a regulation to obtain the abandonment, apparently, of almost 4 million tonnes of sugar. We are increasing financial incentives and annual withdrawals, and additional payments and subsidies. Of course, this aid will stop after 2010 and our farmers will be wiped out, just like the ACP producers, not to mention workers. The only winners will be importers.
These Malthusian policies have been applied to cereals since 1993. At 9 o'clock, Mr Parish told us that there was a wheat shortage, that prices were rocketing and that set-aside needed to be abandoned. So there is some hope at least: in 2011, there will be a new regulation telling us that there is a sugar shortage and that we need to start growing it again!
Jana Bobošíková
(CS) Ladies and gentlemen, as a Member of this Parliament for the Czech Republic where the sugar market has already been restructured, I cannot agree with the proposed changes. They are inappropriate and unfair.
It is becoming clear that the reform does not result in a series of economically uncompetitive companies. It produces a disproportionate situation from which only the big European sugar companies profit, with no benefit whatsoever to consumers and growers.
I cannot explain to the citizens how a number of countries have not renounced their sugar quotas at all or have done so only on a very small scale while the rest of us are now supposed to pay them more money for breaking a commitment.
First and foremost, I absolutely do not agree with increasing the aid in cases of partial restructuring to the level of full restructuring aid. Secondly, increasing the amount of restructuring aid to beet growers and contracted suppliers of machinery from 10% to 50% is totally unjustified. Thirdly, I do not support an increase of additional payments to producers or any increase of temporary restructuring aid; nor do I support an increase in additional payments to suppliers. Fourthly, the proposal to treat the dismantling of facilities that took place last year as having taken place this financial year and in the course of the following years is, in my opinion, completely absurd.
On the contrary, ladies and gentlemen, the key issue for me is taking into account the full amount of quotas renounced during the whole restructuring period. I certainly do not support the move to allow the quotas renounced by companies from the financial year 2008-2009 to be taken into account.
I believe that unless the Commission intends to modify its purely bureaucratic and highly unfair method of managing the sugar reform, the best thing to do would be to abolish sugar quotas as quickly as possible and liberalise the sugar market.
Kyösti Virrankoski
on behalf of the ALDE Group. - (FI) Mr President, the EU's sugar policy is in a strange situation. Sugar quotas have been reduced by 2.2 million tonnes but at the same time the Commission has been selling millions of tonnes of new quotas. The net reduction is therefore just a million tonnes, whilst the target was six times that figure.
At the same time, the big producer countries have only increased their production. For example, Germany has increased its production from what was around 240 000 tonnes a year and France from what was 350 000 tonnes a year. It is primarily just the small countries that have reduced their production. Of the biggest countries only Italy has reduced its production significantly. The result of this has been that the small countries and those countries which are poorer off in terms of their natural conditions have had to reduce their sugar production.
At the same time again, more than EUR 3 billion - three thousand million euros - has accumulated in the restructuring fund, of which perhaps around EUR 2 000 remains unspent at present. This money has mainly come from consumers, because consumer prices have fallen more slowly than producer prices, and this difference has accrued in the Fund. On the other hand, it has also come from farmers, whose producer prices have gone down. This money has been and is being paid mainly to the industry, in the form of a massive amount of compensation to the tune of EUR 730 per tonne, while at the same time just around 10%, at best 20%, of this cash goes on changing the industrial structure and tearing down factories.
The entire sugar policy is a warning example of what can happen when we start implementing agricultural policy on industry's terms. The industry is being paid huge amounts in compensation and we are getting very little in return. It is to be hoped that in the future agricultural policy will be practised as agricultural and not industrial policy.
We should focus special attention on the importance of solidarity. It should also be taken into consideration because all countries, including those which have reduced their sugar production, still have to pay prices for sugar which are higher than global market prices, although they are simply not allowed to produce it because the industry has decided against it.
In the same way, in the future we will need to ensure that we do not start applying any similar kind of system to other areas of agricultural production.
Neil Parish
Mr President, I should like to thank Ms Batzeli very much for her report. I should also like to thank Mr Deß very much for shadowing this report for the PPE-DE Group.
I think it was Margaret Thatcher who once said 'you can't buck the markets', and the problem with the whole sugar regime is that it is exactly what we have tried to do over the years.
I commend the Commissioner and what she is doing, because it is a very complex situation and one that we need to sort out. We need to take more sugar out of the system and we need to make Europe much more competitive in sugar production. The whole thrust of CAP reform now is to give support to farmers for environmental reasons, but also very much to push them in the direction of producing for the market place.
I think that the reform of sugar this year is perhaps going to be easier than in previous years, for the simple reason that we have now seen cereal prices three times what they were last year. Therefore, some sugar producers will perhaps decide that they will take the money in the restructuring and that they can grow cereals or oilseed rape and they can make a good living from that. Because, whatever we do with sugar, we have to be sure, as I said, that we move in the direction of reducing the amount produced in Europe - but we must still allow the farmers to have a living from the land.
We also have to consider not only balancing sugar production in the European Union, but the fact that there are ACP countries from which we import sugar. In my own country, the United Kingdom, Tate & Lyle imports over one million tonnes of sugar. It is very concerned to make sure that it can get access to this sugar at the same time as we are reducing and reforming the sugar regime. I would ask the Commissioner to look sympathetically at that side of the argument as well.
María Isabel Salinas García
(ES) Mr President, Commissioner, almost two years ago a legislative package was adopted for the reform of the sugar sector, with the aim of adapting it to a globalised market that really left few opportunities for our farmers.
As you well remember, Commissioner, it was a traumatic reform on which it was difficult to reach an agreement in Parliament. Now it seems that the objectives of reducing quotas are not being achieved; that is why the Commission is putting forward this new proposal aimed at redressing the situation before it is too late.
We think that in principle, the Commission's proposal is positive, as to a certain extent it gives farmers the opportunity to take the initiative to renounce. However, in certain aspects, Commissioner, we also think that it is inadequate and that it may produce undesirable effects in some countries such as Spain.
I would therefore like to highlight two points that I think are very important. Firstly, I would like to stress the importance of the amendments tabled by the Socialist Group, and I would like to thank our rapporteur, Katerina Batzeli for her work, on the need, in some cases, to extend additional aid for withdrawal for farmers to the 2009-2010 marketing year. We think that this change is vital so that the measure does not fall short and the expectations of producers are fulfilled.
Secondly, I would like to draw attention to the amendment that was adopted in committee in my name, which comes to plenary as Amendment 11, on deeming full dismantling to have taken place where facilities have been converted to bioethanol production. This measure has two purposes: on the one hand, it encourages renunciation, as it gives a way into other markets for these facilities and, on the other hand, it promotes a sector such as biofuels at a time when there is so much talk of the need to increase supply.
Commissioner, this reform has already been traumatic for many countries, such as mine; I think that there should be money and opportunities to maintain income for farmers who wish to renounce, but above all, for farmers who wish to continue.
Janusz Wojciechowski
(PL) Mr President, the reform of the sugar market is one of those reforms whose sense is very hard to explain to farmers in the European Union, including farmers in my country, Poland. The administrative and financial pressure to cut back sugar production from 18 to 12 million tonnes is not convincingly justified. There is talk of a need for solidarity with farmers on other continents, though it is clear that this is not about their interests: it is not about farmers' interests so much as the global interests of large concerns. In the name of these interests, the European Union, under the auspices of successive 'reforms', is gradually disposing of its agriculture and setting forth down the very hazardous road of making itself dependent on food supplies from outside. This policy is leading to a loss of security in food supplies, a security that is of great importance to future generations. My fear is that it will not be long before everyone, and not just farmers, will regret these irresponsible reforms which are going on today, the harmful consequences of which we shall all soon recognise.
Ilda Figueiredo
(PT) As is well known, we are very critical of this reform of the sugar sector. We always uphold food sovereignty and we therefore think it is unacceptable that a country such as Portugal, with only one sugar factory in Coruche and one small factory in São Miguel, in the Azores, which scarcely managed to supply half the country's consumption needs, should be confronted with the obligation to reduce its quota for sugar produced from sugar beet.
It is clear what the consequences will be: farmers and undertakings will abandon production, thus creating more unemployment and adversely affecting the development of rural areas. It is therefore essential - as thousands of small and medium-scale farmers asserted on the streets of Porto on 17 September whilst the Agriculture Council was meeting in Portugal - to change policy in order to take account of the specific situation in each Member State and their own production and consumption needs, securing farmers' incomes and the development of rural areas. That is what we are once again proposing to the Commissioner.
Kathy Sinnott
Mr President, before I begin can I remind everyone that it is not a question of beet or grain. In Ireland, beet was grown in a mutually beneficial rotation with wheat.
Commissioner, sugar restructuring in Ireland was a disaster. It was handled badly by the company Greencore and our Minister for Agriculture. Many of my constituents have suffered and social displacement is widespread, which is why the least we can do is go back and compensate these people.
Our hope of having a rational biofuels industry that was integrated, rather than competing with food production, was set back by years, if not destroyed. When I approached the Commission to try to head off disaster, I was told that the scheme was set and that to tamper with it, even for a good reason, would unravel the whole thing. But now we are tinkering with the scheme. Is it not possible at this stage of adjustment to do something about the mess left behind in Ireland?
Ioannis Gklavakis
(EL) Mr President, Commissioner, Mrs Batzeli and Mr Deß, we all know that the proposed amendments to the regulation on the CMO in sugar aim to make participation in the Community sugar industry more attractive under the restructuring regime so as to achieve the target of reducing Community sugar production. Allow me to make three observations about this.
Firstly, the Commission's approach is positive. This is particularly the case with its proposal to give even retroactively increased support to beneficiaries who have already complied with Regulation No 318/2006, allowing them to feel that they have not been unjustly treated despite contributing first to the restructuring of the sector;
Secondly, it has been made perfectly clear, I believe, that if the desired reduced level of production is not reached, future measures for a linear reduction will apply only to those Member States which have not made an effort to attain this target. On the other hand, the regulation will take into account the countries which have made significant reductions and whose industrial units still remaining have now reached critical levels. It is particularly important for countries such as mine to be certain that this position will not be forgotten when we discuss the future of the CMO in sugar for the post-2010 period;
Thirdly, I should like to raise the matter of bioethanol. Let us take this opportunity to examine seriously the possibility that perhaps in the end our enthusiasm for bioethanol will evaporate, and maybe many of the factories producing it will not be viable. What will the future hold for the workers in this industry, and what will happen to the farmers? Shall we once again have to cope with an army of unemployed?
Gábor Harangozó
(HU) Thank you, Mr President. Commissioner, ladies and gentlemen. Regrettably, the restructuring of the sugar market has not brought the results we had hoped for. In modifying the restructuring scheme, it must be taken into account that some Member States have renounced a substantial portion of their quota. Hungary has abandoned 27% of its quota, whilst the average for the European Union as a whole is just 10.5%.
When determining the final quota reductions, therefore, I am in favour of taking into account the scale of production in each Member State. It would be inappropriate if the same reduction was prescribed for all Member States of the European Union at the same time since production characteristics differ in each country.
Moreover, modification of the restructuring scheme should not impact negatively on Member States that have already implemented a higher-than-average quota reduction. For this reason I oppose taking beet and isoglucose quotas together when calculating the ratio of the quota renounced to the initial quota. Meanwhile, the maximum amount of restructuring aid should also be granted in instances where facilities are not dismantled but converted to alternative uses such as biomass or bioethanol production. Thank you for your attention.
Zdzisław Zbigniew Podkański
(PL) Mr President, the fact that, as part of the reform of the sugar market, sugar supply has fallen by 0.2 million tonnes in the last two years, an amount that differs considerably from the proposed level, should come as no surprise to anyone. This outcome was foreseen by Polish MEPs, as witnessed by our speeches both before the Committee on Agriculture and Rural Development and in the plenary of the European Parliament.
The failure to achieve the intended aims indicates that adequate motivation and incentives, including opportunities for beet growers to take up other production, were not put in place. This was acknowledged by the Committee on Agriculture and Rural Development when they proposed, among other things, raising the amount of aid set aside for growers and entities providing services from 10% to 50% of the aid allocated to a sugar factory business, and raising the extra payment for growers for the marketing year 2008-2009 from EUR 237.50 to EUR 260 per tonne of the quota which was being renounced.
It also needs pointing out that the Commission is currently not implementing the principles of the reform, the aim of which is to maintain production in the most competitive regions. The proposed changes do nothing to counter the problems, let alone resolve them; they are making the situation worse.
Carmen Fraga Estévez
(ES) Madam President, thank you very much to the Commissioner for being here. I think that the Commissioner, the rapporteur and many of the speakers have highlighted the problems that there have been with implementing the 2005 sugar reform, and the fact that abandonment of production has suffered delays leaving it far short of the objective of 6 million tonnes provided for in the reform.
I therefore believe that we all welcome the proposal that the Commission is now putting forward, which will give a new impetus to abandonment. The sector, too, mainly the beet production sector, is very pleased that the restructuring process is being speeded up given that, as the Commissioner also said, otherwise there will be an across-the-board cut in quotas in 2010, with no aid funds to compensate for those cuts.
I think that the amendment I tabled on behalf of the Group of the European People's Party (Christian Democrats) and European Democrats is in line with this philosophy and this new proposal. I am referring to Amendment 31, which calls for a report evaluating the reform and, if necessary, proposals to extend this aid fund by one year during the 2010-2011 marketing year. It was initially planned for a period of four years, to compensate, as I said, for this initial delay in implementing the reform.
This is something that has been called for by producers, and I think that it should be supported, especially given that the fund is financed solely by the sector, and therefore has no financial impact on the Community budget.
I ask, Commissioner, for this amendment to be approved by the Commission, and of course also my fellow Members.
Finally, I would just like to thank Mrs Batzelli for her work, her reports, and the improvements she has proposed, with the support of the entire Committee on Agriculture, and for the proposal presented by the Commission.
Libor Rouček
(CS) Ladies and gentlemen, there is no doubt that far-reaching reforms are needed in the sugar industry in the European Union to enable it to remain successful in the future. Reducing production is an essential component of these reforms. However, this reduction should focus primarily on companies that are uncompetitive; unfortunately, the reality is often different.
For example, in my home country, the Czech Republic, the sugar factories that were new, effective and prosperous were closed and quotas were renounced on behalf of supranational producers. Of course this had a very negative impact on domestic growers and consumers.
I would therefore like to appeal to the Commission to take competitiveness principles into account, to a greater extent than before, when implementing the necessary reforms in the sugar industry, and to pay much more attention to the development of the biofuels sector. I think that biofuels offer new opportunities to sugar beet growers and represent the future.
Zbigniew Krzysztof Kuźmiuk
(PL) Madam President, Commissioner, the reform of the sugar market which was begun in 2005 is not achieving the anticipated results, despite huge financial outlay. Despite large financial incentives, amounting to EUR 730 per tonne of reduction in sugar production, in the Community as a whole sugar production has fallen by barely 1.1 million tonnes, instead of the anticipated 6 million. The next set of changes to the functioning of the sugar market proposed by the Commission are not only failing to improve the situation, they are actually making it worse, as they are not consistent with the main principle of the reform, in other words sustaining sugar production in the most competitive regions.
What I think is needed is, firstly, to create conditions for stable development for the most competitive sugar producers in the Community, to enable EU production to compete on an increasingly open world market.
Secondly, we need to draw maximum advantage from sugar's export potential within the framework of the limit agreed with the World Trade Organisation.
And finally, thirdly, if these solutions fail to produce a marked improvement in the sugar market, it will be necessary to reduce production, but using a linear factor that is the same for all Member States.
Vladimír Železný
(CS) Madam President, I represent a country that invented the sugar cube. High-quality sugar was something we used to be proud of but the European Union ruthlessly took this pride away from us.
If Regulation (EC) No 320/2006 is implemented, the Czech Republic will be penalised for its appropriate behaviour towards foreign investors from the original EU countries that it has allowed to take over the sugar industry in the country. This Regulation is an inappropriate attempt to satisfy the interests of the big European sugar refining companies, while the interests of the countries that are the traditional growers and producers are being ignored.
It is therefore necessary, as the amendment by Mr Fajmon and others suggests, to enable Member States to scrap provisions a) and b) and leave it to the individual Member States to determine how to deal with the critical situation that would arise if the quota fell by 20% or more. Otherwise, the Czech Republic might, absurdly, become an importer of the traditional product it has been making for centuries.
One day, when our grandchildren are making a list of reasons why the Czech Republic should leave the European Union, the sugar policy and the regulations we are now debating will be at the top of the list.
Ville Itälä
(FI) Madam President, Commissioner, I understand very well that sugar quotas need to be cut further and I am in favour of it. I also understand, in the light of the figures we have, that the previous reform did not succeed.
This issue, however, is how this future reform is to be implemented. It should be fair to all Member States, and if we consider it from the viewpoint of my country, Finland, for example, there were two sugar factories in the country, and the previous cut in quotas, a reduction in practice of 40%, led to one of them shutting down. If there were to be another cut of 13% under this reform, that would mean in the worst case scenario that all sugar production would end in Finland, because both factories would have had to close.
This is obviously an unfair situation for Finnish sugar growers and Finnish industry. That is why I support the amendment which my colleague, Mr Fajmon, has tabled and which states that this proposal should not apply in any way to Member States whose quotas have already been cut by more than 20% unless they themselves then decide otherwise.
I would hope that the Commissioner also understands the situation small countries are in. In Finland, while we are now discussing the subject of cuts in aid to the south of the country under Article 141 of the Accession Treaty, the rural population's belief in the European Union is very weak. There needs to be some glimmer of hope, and above all these reforms have to be carried out fairly, so that all Member States get treated the same way.
Mariann Fischer Boel
Member of the Commission. - Madam President, first of all I would like to thank all of you for all your valuable comments. I think that we see the complexity of this issue from the comments delivered here today. I would just like to make a few comments.
First of all, I am convinced that what is now proposed - which I would describe as a big carrot for the sector - will work. The carrot is quite attractive because we now give farmers the possibility of getting 10% of the restructuring fund, and the restructuring fund for the year 2008/09 is EUR 625. EUR 62.5 plus the top-up that we pay from the restructuring money - EUR 237.5 - comes to EUR 300 per tonne that the farmers send back to the Commission.
What I consider the most important thing is that, for the first time, farmers can trigger the restructuring fund. This has not been possible before. Previously it was only the industry. Now farmers can say 'I want to leave and I want my EUR 300 per tonne, and I get the compensation for the reduction in prices on top of that'. And that is not a one-off payment: that continues.
I completely agree with Mr Parish. I think that the alternative to sugar beet production is much more attractive now than it has been for decades, with the cereal prices, with the oil-seed prices. Therefore, I presume that farmers will make their calculations and look at the bottom line of the most attractive way of arranging their future production.
I mentioned retroactivity the first time that I spoke. Retroactivity is there so that those who have delivered from the very beginning will not be punished; they will be compensated. It is for beet growers, for inulin syrup producers and for chicory growers. So there is no difference between the various types of beet production.
So I am confident, and I am very thankful for the quick reaction from Parliament, which I hope will allow us to find a political agreement in the Council tomorrow so we can send a clear signal to the sector, to the beet growers, so they can start planning their next production season.
I am quite sure that this will be to the benefit of the whole sector because, as was also mentioned here today, the alternative to not using this possibility will be a linear cut with no compensation. So I am quite sure that lots of calculations will take place on the various farms and areas where this may be attractive, to deliver the tonnes that we need to find the right balance in our sugar sector.
Once again, thank you very much - especially to the rapporteur, Ms Batzeli - for all the work done on this difficult dossier.
President
The debate is closed.
The voting will take place today.
Written statements (Article 142)
Béla Glattfelder  
in writing. - (HU) Madam President, in its current review of the sugar reforms, the European Commission is requiring European farmers and the European sugar industry to make yet further unreasonable sacrifices in the name of restoring a balance in the sugar market. In my opinion on the European Parliament's report drafted on behalf of the Committee on International Trade some time ago, I pointed out that it would not be possible to achieve the desired balance in the European sugar market as long as there is no legislation providing for effective import protection. In its report, the European Parliament also put forward proposals to the European Commission and the Council of Agriculture Ministers to limit imports of sugar from third countries. In the end the legislature did not incorporate these proposals into the final document.
I agree with the tabled amendment to the present proposal suggesting that Member States that have already renounced at least 20% of their quota should not have to implement further quota reductions. This would be equitable and just towards countries that have already made a serious effort to implement the sugar reforms.
At the same time, however, I think it is important that a review of the sugar reforms should also include measures to make the sugar industry more competitive. With this in mind, I have tabled an amendment giving Member States discretion to decide first to make it possible for smaller, less competitive sugar beet growers to renounce the right to transport beet. This is a significant advantage for smaller, less well-informed growers, but at the same time it will help the European sugar industry to become more competitive internationally too.
Mairead McGuinness  
in writing. - It is regrettable that the Commission has returned within such a short period of time with a second sugar restructuring package for Parliament to vote on. The initial package resulted in the demise of the Irish sugar industry, to the detriment of the country, farmers and growers.
Unfortunately, to date the compensation package has not filtered fully down to either farmers or contractors.
I disagree with the Commission's attempt to limit the compensation paid to growers and contractors to just 10% in the current package - allocating the remaining 90% to processors seems excessive.
In the initial restructuring scheme a minimum of 10% was allocated to growers and contractors, with Member States being given the flexibility to decide on the precise share out but with this package the Commission is very fixed in how compensation should be allocated.
It is clear that increased levels of restructuring aid are needed to reach the Commissions targets. I welcome that increased level of restructuring aid will be paid to those who have already quit beet production.
I would urge that the compensation payments due to Irish farmers and contractors be paid out as a matter of urgency - this saga has gone on for too long.
Witold Tomczak  
in writing. - (PL) Mr President, the rules of the common agricultural policy have been being flagrantly violated in many markets in the industry for some time now. The sugar market is just one more disreputable example of this. The reform of this market adopted barely two years ago contained unfair solutions for the new Member States, as it gave preference to a few old Member States which generate surpluses in the so-called B quotas that are costly to the taxpayer. One of the aims of the reform was to improve competitiveness in the sector. Those who were supposed to remain in the market were those who were most competitive. The revision that is currently being proposed is aimed at punishing those who are most competitive. After all, that is what the introduction of new factors and the increased compensation with retroactive effect will achieve. Is there any logic to be discerned in what is going on here?
When the interests of the old EU are challenged, principles go out of the window. Solidarity or an equal chance to compete no longer means a thing.
This is true of the entire agricultural sector in which the richer countries get the larger subsidies. All attempts to do away with discrimination against the poorer new Member States run up against the disarming sincerity of representatives of the older States - you are right, they say, but we are not going to open up 'Pandora's box'. But now, looking at the sugar sector, the arrangement that was signed up to not very long ago can be changed! Just because it is affecting the interests of the older Member States and the big concerns.
