Reform of the sugar sector

22/06/2005 - The European Commission today proposed far-reaching reforms to the Common Market Organisation for sugar. The changes will enhance the competitiveness and market-orientation of the European Union sugar sector, guarantee it a viable long-term future and strengthen the EU's negotiating position in the current round of world trade talks. They will modernise the current system, which has remained largely unchanged for around 40 years. The new system will continue to offer preferential access to Europe's sugar market for developing countries at an attractive price well above the world market level. African, Caribbean and Pacific countries which traditionally export sugar to the EU will benefit from an assistance programme, also adopted by the Commission today. The Commission reform proposals include a two-step cut totalling 39% in the price for white sugar; compensation to farmers for 60 percent of the price cut through a decoupled payment - which would be linked to the respect of environmental and land management standards and added to the Single Farm Payment; a voluntary restructuring scheme lasting four years to encourage less competitive producers to leave the sector; and the abolition of intervention. The ACP assistance plan will earmark EUR 40 million for 2006 and pave the way for further assistance. The Commission hopes for a political agreement on the proposals at the Agriculture Council in November.