Accomplishing a sustainable agricultural model for Europe through the reformed CAP: Sugar sector reform

This paper discusses the recent findings of the Common Agricultural Policy Commission set up to examine the current sugar trade regime.The Commission proposes the following measures:a significant reduction, in two steps, of the institutional support price for EUsugar with the abolition of intervention and the introduction of a reference pricethe introduction of partial compensation for producers in the form of a direct decoupled payment within the CAP budget limits, with the same historical reference period, as used in the 2003 CAP reform (2000–2002)simplification of the present quota system by merging the A and B quotas into one quota and the reduction of the resulting total quota level, in order to reach a sustainable balance on the EU sugar marketrestructuring of the EU sugar sector through transferability of quotas between Member States and the introduction of a sugar factory conversion scheme, in order to facilitate the necessary adjustments and smoothen their impactmodification of the import regime for Western Balkans, in order to provide EU partners with a clear framework which, while allowing the respect of present trade concessions, prepares their sector for the adjustments needed to perform within a realistic and economically sustainable environment.In reaching its conclusions the Commission recognises that while some elements, such as the Everything but Arms (EBA) agreement are fixed, this proposal cannot take full and precise account of all possible future international developments which could affect the sector. These include the outcome of the Doha round, the challenge of elements of the present sugar regime in a panel before the World Trade Organisation, the future of ethanol production and the prospects for world market price development. As such the Commission recommends that any price or quota changes should be reviewed as early as 2008. [adapted from author]