COMMON ORGANISATION OF THE SUGAR MARKET
Draft Council Regulation on the common organisation of the market in the sugar sector.
||Articles 36 and 37 EC; consultation; qualified majority voting
||Agriculture, Fisheries and Food
|Basis of consideration:
||Undated ministerial letter
|Previous Committee Report:
||HC 23-xxxi (1999-2000), paragraph 10 (29 November 2000), HC 93, oral evidence given by the Minster on 20 December 2000, and HC 28-ii (2000-01), paragraph 4 (10 January 2001)
|To be discussed in Council:
9.1 For the reasons set out in our Report
of 29 November 2000, the Community's sugar regime is extremely
complex, and, since it was neither subject to the major reforms
which took place in the arable sector in 1992, nor part of the
Agenda 2000 reforms of the CAP, it is widely accepted that its
reform is long over-due. However, the Commission considers that
account needs to be taken of such factors as the financial framework
agreed in 1999 in Berlin; the forthcoming round of WTO negotiations
on agriculture; and the future enlargement of the Community. It
also believes that there is a need to review first the operation
of the quota system, and such issues as lack of competition within
the sector, which it expects to take until July 2002 at the latest.
It therefore proposed in October 2000 that the present regime
should simply be continued for a further two years until 30 June
2003, with some modifications (including a relatively small cut
in sugar quotas).
9.2 As we also noted in that Report, the
Minister of State (Commons) at the Ministry of Agriculture, Fisheries
and Food (the Rt. Hon. Joyce Quin) told us that, although the
Government would have preferred to see action taken on price rather
than quota levels, it nevertheless supported the broad thrust
of the Commission's proposal, including a limitation of the next
regime to two years. However, she also expressed concern at the
apparent lack of coherence between this proposal and the separate
for duty-free access for all products (except arms) from the least-developed
countries (LLDCs), and she pointed to the need to assess the impact
on the sugar regime of such imports, which were due to be phased
in over the next three years.
9.3 We therefore sought written evidence
on this last point from a number of interested organisations,
and, on 20 December 2000, we took oral evidence from the Minister
of State and from the Minister for Trade (Mr Richard Caborn).
This focussed mainly on the "everything but arms" proposal,
but the Minister of State again highlighted the lack of coherence
between the two proposals, and said that the Government had been
pressing for changes to the sugar regime which were consistent
with the "everything but arms" approach. Since we were
not clear precisely what these changes were, we said in the conclusion
to our Report of 10 January 2001 that we would be grateful for
further clarification on this point.
9.4 Since then, we have also recorded in
our Report of 28 February 2001 the further information we had
received from the Minister for Trade about the changes agreed,
with UK support, to the "everything but arms" proposal
to reflect some of the concerns which had been expressed. In the
case of sugar, the start of the tariff elimination would be deferred
until 2006 and completed in 2009, and would be accompanied by
global duty-free tariff quotas, increasing from 74,000 in 2001-02
to 197,000 tonnes in 2008-09. In view of the interest in this
proposal, and the circumstances surrounding its introduction,
we have recommended it for debate in European Standing Committee
C, but, in doing so, we also reminded the Minister of State that
we had yet to receive the clarification we had asked for as regards
the changes needed to the proposal for reforming the sugar regime.
9.5 We received on 20 March 2001 an undated
letter from the Minister of State on this point. She says that,
although the implications of the "everything but arms"
proposal need to be taken into account in the reform of the sugar
regime, the practical implications would now appear to be modest
as a result of the changes which have been made in the former.
Thus, to the extent that the LLDC quota increases the availability
of raw sugar for refining, there was likely to be a corresponding
reduction in the quantities imported from the ACP countries and
India under the Special Preferential Sugar (SPS) quota, and amendments
may also be needed to manage the interim LLDC quotas. The Minister
says that the Government will also press the Commission to ensure
that the implications for the sugar regime of phasing out duties
on LLDC sugar between 2006 and 2009 are taken into account in
its studies on competition in the sugar sector.
9.6 The Minister has also provided a brief
update on the Council's consideration of the sugar reform proposal.
She says that the majority of Member States have expressed a preference
for a five-year extension, but that there have been no recent
discussions, pending a decision on LLDC access and receipt of
the European Parliament's Opinion, due in the middle of this month.
However, she understands that the Swedish Presidency plans to
place sugar on the agenda for the April Agriculture Council.
9.7 We are grateful to the Minister for
this further information, which suggests that the immediate impact
on the sugar regime of the amended "everything but arms"
proposal is likely to be relatively slight. Since this last point
was the main concern we had on the proposal for reforming the
regime, we are now clearing this document.
39 (21715) 12335/00; see HC 23-xxxi (1999-2000), paragraph
9 (29 November 2000), HC 93, oral evidence given by the Minister
on 20 December 2000, HC 28-ii (2000-01), paragraph 3 (10 January
2001), and HC 28-vii (2000-01), paragraph 2 (28 February 2001). Back