Sugar
The European Union is the world's biggest producer of beet sugar and the principal importer of raw cane sugar for refining. The EU sugar market is regulated by production quotas, a minimum beet price and trade mechanisms.
The EU is the world’s leading producer of beet sugar, with around 50% of the total. However, beet sugar represents only 20% of the world’s sugar production; the other 80% is produced from sugar cane.
Most of the EU's sugar beet is grown in the northern half of Europe, where the climate is more suited to growing beet. The most competitive producing areas are in northern France, Germany, the United Kingdom and Poland. The EU also has an important refining industry that processes imported raw cane sugar.
EU sugar policy
The last agricultural quota system in place, which managed sugar production in the European Union, was abolished on 30 September 2017, after almost 50 years.
The decision to end sugar quotas was taken by the EU with the reform of the Common Agricultural Policy (CAP) of 2013, after a major reform and restructuring process started in 2006. Between 2006 and 2010, the sugar sector had been thoroughly restructured with the support of €5.4 billion.
As a result, the sector has been able to carefully prepare for this moment and productivity has improved substantially over the last years. The end of the quota system gives producers the possibility to adjust their production to real commercial opportunities, notably in exploring new export markets. It also significantly simplifies the current policy management and administrative burden for operators, growers and traders.
x Income support for sugar beet farmers has been integrated into the direct payment system. EU countries have also the possibility to grant voluntary coupled support to specific sectors in difficulty – including sugar beet and sugar cane production. Eleven EU countries have decided to grant voluntary coupled support for sugar beet producers.
The reform has allowed for simplification and greater market orientation of the EU sugar policy. The reform has allowed for simplification and greater market orientation of the EU sugar policy.
Income support for sugar beet growers, which was once ensured by the allocation of market shares, is now integrated into the direct payment system (see here).
However, EU countries also have the possibility to grant additional and voluntary support to specific sectors in difficulty, including sugar beet and sugar cane production.
So far, eleven EU countries have decided to grant additional voluntary support to sugar beet producers, the same ones that enjoyed market shares in the previous CAP management.
Income support for sugar beet growers, which was once ensured by the allocation of market shares, is now integrated into the direct payment system (see here).
However, EU countries also have the possibility to grant additional and voluntary support to specific sectors in difficulty, including sugar beet and sugar cane production.
So far, eleven EU countries have decided to grant additional voluntary support to sugar beet producers, the same ones that enjoyed market shares in the previous CAP management.
EU sugar policy today concerns two main areas: market measures and trade measures.
Market measures
The EU can support the sugar sector with specific market measures, in particular private storage aid, measures against market disturbance and measures to solve specific problems.
Private storage aid is granted when taking into account average recorded Union market prices, the reference thresholds and production costs. The European Commission may grant this aid in the case of a particularly difficult market situation or economic development having a significant negative impact on the margins of the sector in order to keep a certain volume of sugar out of the market during a certain period.
The CMO rules foresee additional support measures in case of severe market disturbances due to sharp increase or decrease in prices, amongst others.
Trade with countries outside the EU
Trade policy is an exclusive power of the European Union – so only the EU, and not individual EU countries, can legislate on trade matters and conclude international trade agreements. International trade is also governed by rules of the World Trade Organisation.
As a major importer of cane sugar, the EU grants duty-free access to the EU market to developing countries under the "Everything but arms" agreement and economic partnership agreements with the African, Caribbean and Pacific countries.
PRODUCTION & PRICES |
