Select Committee on Agriculture Minutes of Evidence



Examination of witnesses (Questions 80 - 85)

WEDNESDAY 20 DECEMBER 2000

RT HON RICHARD CABORN, MR RICHARD CARDEN, MR DAVID WALMSLEY, RT HON JOYCE QUIN, MR HENRY BROWN and MS CHRISTINE BAXTER

  80. The reason I asked that was, with the benefit of my memory of the regime, which was that once again when it was a question of quotas being handed out within the European Union we did not feel we had had a particularly fair deal. Although there is not the prospect of immediate quota cuts, it is likely to be something which will happen in the future. Given the remarks you made where you said you wanted to see a good balance between beet and cane, do you actually think that it would be fair to the United Kingdom, because of our rather unusual structure of market versus some other Community countries, for us to suffer any quota cuts in future?
  (Ms Quin) I should prefer to move away from quotas altogether because that could help us. We are competitive within the European Market but having this very dirigiste system regarding sugar means that when quotas are reduced it tends to be an across-the-board quota reduction because you cannot get agreement among the countries concerned to give up quotas and therefore it tends to be a proportionate cut across the board. I do understand from my advisers who perhaps have longer memories of dealing with the sugar regime than I have, that the current regime was established as long ago as 1968, so my 15 to 20 years was an underestimate. However UK quotas were cut in 1981 because apparently the UK failed to meet them.

Mr Worthington

  81. Could you put this in a wider context, that in the context of the World Trade Organisation and Seattle, these proposals are seen as part of confidence-building measures to try to get the World Trade Organisation and its next round under way again, and that it is very important to tell these least-developed countries that there is something in the World Trade Organisation for them? Would it not be true to say that if these proposals start being phased in, or attacked or undermined, this is likely to be very damaging to the World Trade Organisation which we are seeking to support if we cannot introduce a proposal as modest as this without weakening it very considerably?
  (Ms Quin) The proposals show, that there is a keenness on the part of the European Union and other developed countries and groups, to try to prepare a new WTO round in circumstances where there is more likely to be engagement by the developing countries, and where we are most likely to be able to start off on a positive note and therefore be more likely to achieve progress. However, even if there were not that impetus, there is a very strong feeling in the European Union countries that more needs to be done to help the least developed countries in the world trading system.

Mr Wells

  82. May I come back to the question of price of sugar? Does this not all revolve round price when it comes down to it? If under the EBA, contrary to the expectations of Mr Caborn, the least-developed countries, in particular Tanzania, Malawi, Mozambique, which come to mind because they are very efficient converters of sugar cane into sugar, were able to increase the amount of tonnage to very much greater figures than we now import, that would have an effect in a free market on price. Do you expect therefore that this will be an added reason for the reduction in the European support price, thus making the sugar regime in the end useless to any producer?
  (Ms Quin) It does add to the pressure for a reform of the sugar regime, including a reform of the price fixing mechanisms. Again, a lot depends on how quickly least-developed countries respond to what is on offer under the "everything but arms" agreement. I have to say that I do agree with what Richard Caborn was saying earlier and indeed what I understood the International Development Secretary to be saying recently that given that a great increase from the least-developed countries would depend on investment in those countries, the process is likely to take some time.

  83. Yes, but I do not think quite as long a time as you are desperately hoping for. After all, you can get sugar into production in very large quantities in African countries, both on East and West Coast within three or four years.
  (Ms Quin) I am not desperately hoping. I know this is repetitious but the fact that there is a transitional agreement and a safeguard clause is an important element to take into account.

Mr Todd

  84. Have you not rather beaten around the bush about the character of the sugar regime as it is? You have said it has been largely unreformed for 30-odd years, it is a highly protected duopoly, typical to be honest of the developed world, in sugar and it produces a dumping regime in which surplus product depresses the world market for those outside the club. This desperately needs radical reform, does it not?
  (Ms Quin) I think that is what I have said. I did not think I had beaten about the bush in terms of that statement.

  85. I am just putting it in rather harsher terms than you have. Would you agree with those terms?
  (Ms Quin) I have always strongly believed that the sugar regime in its current form is indefensible. However, I have to say that there are many very strong interests in a large number of Member States in favour of its continuation and therefore to hold out the prospect of an immediate change overnight would be unrealistic on my part.

  Chairman: I shall not beat about the bush in bringing this evidence session to a close by thanking you and your colleagues very much for this new experience for us all. I am sure we shall take good benefit from it and I am sure each of our Committees will look forward to trying some venture like this in the future. Thank you very much.


 
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