EU sugar quotas will end in 2017 as part of the reforms to the Common Agricultural Policy.
Under reforms to the EU sugar sector set out seven years ago, production quotas were set to end in 2015 but farm lobbies clamoured for an extension.
Member states were split on whether the quota regime should be extended; some wanted the quotas to be phased out in 2015, others pressed for an extension to 2020.
In March, member states agreed a compromise that the system, which had been criticised within the food manufacturing sector for pushing up the price of sugar, should end in 2017. However, The European Parliament voted for it to last until 2020.
Announcing agreement on reforms to the CAP, The European Commission said the quotas were now set to end on 30 September 2017. The new date would allow “for additional time for the sector to adjust”.
The Commission added: “This will ensure improved competitiveness for EU producers on the domestic and world market alike, as EU exports are limited by WTO rules under quotas. This will also provide the sector with a long-term perspective. Ample supply on EU domestic markets at reasonable prices will also benefit the intermediate and final users of sugar. In order to provide added security, standard provisions for agreements between sugar factories and growers will be maintained. For the period after quotas, white sugar will remain eligible for private storage aid.”
The CIUS, the association that represents the sugar-using food and drink industries in the EU, welcomed the “compromise” to end the quotas in 2017.
“The end of sugar production quotas in 2017 will enable the supply chain to operate in a more market-oriented environment. This is an important step in achieving supply security, which is a prerequisite for economic growth,” CIUS president Robert Guichard said.
Muriel Korter, secretary general of the CIUS, added: “Until quotas go, the EU must ensure that additional sugar supply is brought onto the market in order to avoid any shortages as in the past. The additional supplies need to be balanced between imports and out-of-quota release, respecting the different local supply needs across Europe.”
EU sugar consumption tends to be above the production quota so, to fill the gap, the EU allows in imports outside the bloc. However, higher global prices have hit imports at times in recent years. The EU has had to respond by cutting duties on supplies from outside the bloc or releasing more EU-produced sugar into the market.