Environment, Food and Rural Affairs Committee

Session 2003-04
10 July 2004 Reform of the Sugar Regime: Committee publishes its report

10 July 2004 Reform of the Sugar Regime: Committee publishes its report

The Environment, Food and Rural Affairs Committee has today published a report which examines the reform of the EU sugar regime.

The Committee concludes that the existing sugar regime is unsustainable. Changes are urgently required to allow the European Union to honour its existing and future international commitments. While it is important that sugar policy moves in the direction of liberalisation, it would not realistically be possible to completely deregulate the sugar sector in a single step.

In striving for a solution that properly addresses the challenges facing the sugar sector, the Committee recommends the following changes to the existing arrangements:

  • the phasing out of the quota system;

  • a reduction in the internal market price; and

  • a lowering of the import tariff rate.

Price reductions would be phased in over time, with production quotas only being lifted when a market balance had been achieved. Flexibility to lower import tariff rates is seen as being particularly important with respect to the ongoing trade negotiations.

The Committee also recommends that:

  • transitional aid programmes should be established to assist the African, Caribbean and Pacific countries which will be affected by changes in the sugar regime;

  • some form of producer compensation will be required to help EU sugar beet growers adjust to the new market conditions;

  • the competition authorities should conduct an investigation into the UK sugar industry, if production quotas are not abolished.

On publication of the report, the Chairman of the Sub-Committee that conducted the inquiry, Paddy Tipping MP, will say:

"All the evidence shows that change is inevitable. Put bluntly, the present arrangements are unsustainable. They do not fit well with the changing CAP and may be in breach of international trade agreements.

"The question we are now faced with is how best to prepare for change. We are advocating price reductions and quota abolition, phased in over time, as this provides the UK sugar industry with the best opportunity to adapt to meet its future challenges.

"It is impossible to predict the final outcome of reform discussions. This will end on positions adopted by Member States and the subsequent negotiations. Change will not occur until 2006. There is an awful lot of talking still to be done, but sugar beet producers and processors need to be thinking about the future."

Mr Tipping will be available for interview by the media once this press notice has been released. Those wishing to speak to him are asked to call Louise Combs on 020 7219 5774.



The report follows an inquiry announced on 16 February 2004 and conducted in April and May 2004. The Committee appointed a Sub-Committee to conduct the inquiry, under the chairmanship of Paddy Tipping MP.

The Committee received written evidence from a number of interested parties. The Committee took oral evidence from: British Sugar plc; National Farmers' Union; Tate and Lyle plc; Oxfam; CAFOD; LDC Sugar Group; ACP London Sugar Group; UK Industrial Sugar Users Group; Royal Society for the Protection of Birds; Brazilian Ministry of Agriculture; the Minister for Food, Farming and Sustainable Energy, Lord Whitty of Camberwell.

The full report will be available on our website from around 3.30 pm on 12 July.