The European Union is the world's biggest producer of beet sugar and the principal importer of raw cane sugar for refining. EU sugar policy today is supported by three pillars: production quotas, a sugar reference threshold and trade measures (border protection). Production quotas will cease to exist as of 1 October 2017, which means that one of these pillars will fall. Another pillar – border protection – is looking increasingly shaky.
The EU sugar sector has invested heavily in technical improvements and cost-reductions, as well as in human capital, research, education and training. Over the last 25 years the average EU cost of production for beet sugar has increased by only 0.4 per cent per year, compared to an inflation rate of 2.3 per cent per year; this translates into a constant reduction of costs relative to inflation across over two decades. According to independent experts like LMC International, many of the EU beet sugar industries are now ranked in the top quartile of world industries for cost competitiveness. Efficiency in beet sugar production has also increased consistently; between 1990 and 2015, the amount of sugar produced per factory in the EU-15 has tripled.
In 2006 a major reform to the EU sugar regime resulted in an acceleration of these positive trends, but came with a high cost. Over the last decade the EU sugar industry has closed almost half its factories with the loss of 4.5 million tonnes of production capacity, over 24 000 direct jobs and 165 000 farm suppliers. Following the 2006 reform, sugar production was completely stopped in five Member States, and was substantially cut (by over 40 per cent) in a further six. These changes affected mainly rural areas.
For the European sugar industry to continue to invest, the right political and regulatory climate is essential. However, the EU's trade policy is posing significant challenges to the long-term viability of the European sugar industry: in both recently-completed and ongoing free trade negotiations the EU is offering access for third countries to the EU sugar market, which is exposing EU sugar prices to downward pressure and volatility. This is because domestic support in many of the major sugar producers allows them to trade at below the cost of production.
The aim of this proposed opinion feeds into the general framework of the Europe 2020 strategy and is twofold: (1) highlight to the European Commission and Member States that the EU sugar industry is highly efficient, with high-quality manufacturing jobs and which is respectful of the environment and (2) investigate possible policy responses to the challenges facing the European sugar sector after 2017, which include (i) a potentially sustained period of low prices and (ii) market opening to some of the EU's main competitors, such as Brazil and Mexico.
Relevant EESC opinions
- NAT/596 Opinion on the Integrated production in Europe (own-initiative opinion)
- NAT/679 Agriculture in trade negotiations
- NAT/662 Agricultural trade/global food security
- NAT/677 More sustainable food systems (exploratory opinion requested by the Dutch presidency)
- Agriculture and rural development
- The Common Agricultural Policy after 2013
- Simplification of the Common Agricultural Policy (CAP)
- The World Trade Organisation (WTO) and EU agriculture
- EU agriculture and the OECD
Policy, strategy, regulation, market and FAQ
- EU sugar policy
- Regulation (EU) No 1308/2013 of the European Parliament and of the Council of 17 December 2013 establishing a common organisation of the markets in agricultural products and repealing Council Regulations (EEC) No 922/72, (EEC) No 234/79, (EC) No 1037/2001 and (EC) No 1234/2007
- Sugar market presentations, statistics and prices
- The abolition of EU sugar production quotas
- EU Agricultural Outlook : prospect for EU agricultural markets and income 2015-2025
- Sugar quotas and EU farm spending budge dominate CAP reform debate
- The future of the sugar market after the abolition of sugar quotas in 2017
- Policy Scenarios for EU Sugar Market Reform
- EU farm policy reform: Agriculture Committee MEPs unveil first draft plans
- Policy Scenarios for EU Sugar Market Reform
- EU sugar policy A sweet transition after 2015?
- EU sugar glut, tariff sour the cane versus beet contest
- France concerned about liberalisation of EU sugar market
- Brexit: First and foremost a WTO issue
- Agriculture market crisis hits machinery sales
- Europe’s broken biofuels policy
- Survey: EU citizens supportive of conventional biofuels use
- EU risks missing climate goals without ‘sustainable’ biofuels, experts warn
Sugar and Trade Authorities
- International Trade Union Confederation- European Trade Union Confederation
- European Federation of Food, Agriculture and Tourism Trade Unions
- Comité Européen des Fabricants de Sucre (CEFS)
- International Confederation of European Beet Growers (CIBE)
- European Sugar Refiners Association (ESRA)
- African, Caribbean and Pacific Group of States
- Starch Europe
- European Association of Sugar Traders (ASSUC)
- Fair Trade Advocacy Office (FTAO).
- EU Beet Sugar Sustainability Partnership