Verbatim report of proceedings

Tuesday, 17 January 2006 - Strasbourg

14. Common organisation of the market in sugar – Support schemes for farmers (sugar) – Restructuring the sugar industry (continuation)

  President. –  The next item is the debate on the following reports by Mr Fruteau, on behalf of the Committee on Agriculture and Rural Development.

  María del Pilar Ayuso González (PPE-DE). – (ES) Mr President, I would like firstly to congratulate Mr Fruteau on the effort he has made to improve the Commission’s proposal, which represents a u-turn in what has been the European Union's policy on the sugar sector since 1968 and which, furthermore, is going to put an end to sugar beet cultivation in many regions of the European Union.

Although this has been mentioned many times, I would like to comment on the lack of respect that the Council has shown towards this Parliament by reaching an agreement and communicating it to the media before hearing the opinion of this Parliament. The gentlemen’s agreement that has always existed within the institutions has been violated. Given anti-democratic gestures such as this, we should not be surprised that the citizens do not believe in the institutions and vote as they do and as they will continue to do.

With regard to the political agreement that the Council has reached, it is closer to the Commission’s proposal than to what the European Parliament is going to vote on tomorrow. I shall just refer to prices. You have agreed a reduction of 36%, while the Commission proposes 39% and we in Parliament are going to vote for a reduction of 30%.

I would also like to express my disagreement with the discrimination against the countries with a production share lower than their consumption and do not therefore produce the surpluses that in theory make this reform necessary. These countries are being penalised, while an extra quota is being provided for the large producers of C sugar.

Finally, everybody talks about producing biofuels as an alternative to the sugar beet that is going to be taken off the market, but how and when are the means going to be provided? I do not imagine that you believe, Commissioner, that with a million and a half hectares for energy crops and a subsidy of EUR 40 per hectare we can respond to the needs of the huge number of farmers who are going to lose their livelihood.

  Csaba Sándor Tabajdi (PSE). – (HU) Mr President, the decision of the Council is brutal for the European, and therefore the Hungarian sugar industry, and hence it cannot be accepted. The European Parliament cannot allow the decapitation of the European sugar industry. If this brutal Council regulation remains in place, in 15 years’ time sugar production will be limited to two European Union Member States: France and Germany.

This could be avoided if the excellent, thorough and balanced report of rapporteur Jean-Claude Fruteau is taken on board, but even the version proposed by Mrs Fischer Boel would be more beneficial for European sugar producers.

The position of the European Parliament is that the price cut should be 30 percent, lower than the percentage specified in the decision of the Council, and compensation should be higher, of 100 percent if possible. It is also important to make sure that the transitional period does not exceed four years. Area-based aid should be linked to partial production, and this should be included as one of the conditions. This will be my request to the Commissioner.

A more moderate price cut, together with the conditions mentioned, would grant more chances of survival to sugar beet production and sugar industry in midfield Member States, such as Hungary. Unfortunately all five Hungarian sugar factories are owned by foreign, French, German and Austrian sugar beet growers, who may decide to restrict production to their own countries. This would present a risk for a country with an economic production at average European levels, such as Hungary. This is why I am asking my fellow Members: let us correct the wrong decision of the Council.

  Johan Van Hecke (ALDE). – (NL) Ladies and gentlemen, the cost of sugar, currently Europe’s most subsidised agricultural product, is three times higher than the world price – an unfair and unacceptable situation indeed, and the reason why I think that sweeping reform was, and is, inevitable.

One question that arises is whether the Commission proposals go far enough. In my view, what is being overlooked is the sugar sector’s structural problem, namely a general overproduction. Far more sugar is already being produced than consumed. This situation will get worse as the price drops, which will only benefit major producers and distributors. In the final analysis, it is the agricultural industry that pockets the savings, while the small farmers receive less for their yields from sugar beet. Ultimately, the consumer ends up paying the same price for a kilo of sugar.

It is, in particular, the poorest countries that are at risk of being the victims of this reform. Preferential treatment has created local sugar crops, often small-scale with a minimum outlay, in various ACP countries. Those countries cannot possibly compete without further European support. Hence the importance of the Kinnock amendment to free up an annual amount of EUR 200 million for the ACP countries. In fact, Mrs Kinnock’s other amendments also deserve our support.

Failure to deliver on the commitments in the framework of the ‘Everything but Arms’ programme will seriously damage our credibility in respect of the LDCs. Moreover, this reform invites a discussion about a general abolition of all export subsidies, as recently promised in Hong Kong. I will conclude by summing up that sugar reform is necessary, but not if it is sweet for major producers while leaving poor farmers with indigestion.

  Ilda Figueiredo (GUE/NGL). – (PT) Mr President, as we stated in the Committee on Agriculture and Rural Development, we are very concerned about this sugar reform and about the positions that the Council unfortunately adopted ahead of this debate.

Our proposals in committee stressed the promotion of the principle of food sovereignty and safety, and the protection of farmers and the industry in regions and Member States experiencing difficulties. We also advocated an increase in production quotas, in countries in which there is a production shortfall in relation to consumption, as in the case of Portugal.

Accordingly, we proposed, and continue to advocate, an increase in production quotas at the Coruche factory in Portugal to 120 000 tonnes of sugar beet, in order to guarantee economic viability, jobs and sugar beet production, given the good conditions in Portugal and the major shortfall in sugar production in relation to consumption.

  Kathy Sinnott (IND/DEM). – Mr President, they say it is better to give a fishing rod than a fish. If we are going to shut down sugar production in Ireland and in the EU, we can and must properly compensate the farmers and producers, even if just to salve our own conscience.

But are we crazy? Why are we shutting down sugar production when we desperately need to find alternatives to petroleum fuels? Why are we paying to have empty fields and rusting equipment when we need sugar production more than ever? Sugar has other uses besides sweets.

On the one hand, we are warning of the disappearance of oil and promoting alternatives; on the other hand, sugar – one of the viable alternatives – has been made to disappear. One hand does not seem to know what the other is doing. How can we accomplish anything?

While we are planning our own compensation package, let us remember third countries like Mauritius, which are being devastated by our sugar reforms.

  Zdzisław Zbigniew Podkański (UEN).  – (PL) Mr President, liberalisation of the sugar market is a complex problem, and one that requires our particular attention. The European Parliament demonstrated its awareness of this fact by adopting a resolution on the future reform of the common market organisation for sugar on 10 March 2005. Unfortunately, the European Commission ignored this resolution. In July 2005, it presented three proposals for regulations that undermined the meaning of the resolution that the House had adopted. Parliament was ignored for a second time on 24 November 2005, when the Council adopted a final version of the reform without asking the House for its opinion, and in the face of opposition from the Polish and Greek Agriculture Ministers. This has led to us being presented with proposals that violate the principle of European solidarity, and whose aim is to ensure that the sugar market is reformed at the expense of smaller countries, in particular the new EU Member States. A further aim is to ensure that European sugar production is concentrated in Germany and France.

The proposed solutions will work to the disadvantage of farmers and sugar factory workers, and to the advantage of the large sugar companies. The individual and the principle of partnership have fallen by the wayside in this reform. The new Member States have privatised their sugar factories, yet the vast majority of such factories in Poland were taken over by foreign owners at a mere one third of the price that they will now be paid for stopping production. The situation is similar in many other countries.

For these and many other reasons, I would suggest that all three proposals be rejected, and that a new reform be drafted that would in keeping with Parliament’s resolution of 10 March 2005.

  Jan Tadeusz Masiel (NI).  – (PL) Mr President, I am fully aware that ever more far-reaching reforms of the common agricultural policy must be and will be carried out. It is an unfortunate fact that these new reforms will work to the disadvantage of farmers, and that as usual the new Member States will suffer most. This is yet another example of the unjust terms upon which we joined the EU.

It will be no secret to the Commissioner that the reform of the sugar regime currently under way will not win her any friends in Poland. She should understand our point of view, however, and pay due attention to it. As the rapporteur said, our attention should be focused in particular on the men and women who earn their living from sugar production. The planned compensation should be targeted mainly at workers in sugar factories and at farmers, rather than at the owners of such factories. This is all the more true since the majority of sugar factories in Poland are under foreign control.

The transfer of production quotas from one country to another should be prohibited in order to avoid speculation. This reform of the sugar market is yet another wasted opportunity. Instead of acting as an expression of solidarity between EU Member States and with developing countries, it will result in insufficient aid for poor countries and fresh points of contention between Member States.

  Czesław Adam Siekierski (PPE-DE).  – (PL) Mr President, Commissioner, there is an urgent need for a reform of the sugar market, since the present regulation governing quotas, prices and export subsides expires on 30 June 2006. Yet changes of the kind that have been proposed to us are unacceptable.

The view held not only by myself, but also by the majority of sugar beet farmers in Poland, is that the only word that can be used to describe these changes is scandalous. The political compromise that has now been reached by the Council is intolerable. It has even been claimed by Polish sugar beet farmers that the reform of the EU sugar market was delayed on purpose until after the new Member States had joined, so that sugar production in the EU could be scaled down at their expense. The European Commission has said time and time again that C sugar quotas destabilise the market. The WTO panel ruled against us, and we were unsuccessful in our appeal. Yet the compromise reached by the Council of Ministers provides for an additional 1.1 million tonnes of C sugar for the Member States that produce most of it.

There is an astonishing lack of consistency in the measures taken by the European Commission and the Council. Even though the goal of these institutions is to limit production, they have proposed an increase for countries producing large quantities of what is known as C sugar. We received several Christmas presents along these lines, but it is a shame that Father Christmas was not as generous to all the other countries. How do the Commissioner and the Council explain the fact that only selected countries will receive additional aid? How have these countries been selected? The cost of all these Christmas gifts, which will take the shape of more generous restructuring payments, will be met by other, much poorer countries, including Poland. I would ask the Commissioner whether the reform of the sugar market amounts to nothing but haggling, or whether it is based on consistent measures that will ensure that the European sugar market is competitive.

I would ask Parliament to adopt the amendments that I have tabled with a view to improving this reform of the sugar market, at least in part. Let us hope that the Commission and the Council take note of them. There is still a chance that they will do so, and I would be very grateful if they did.

  Marc Tarabella (PSE). – (FR) Mr President, Commissioner, ladies and gentlemen, this debate and subsequent vote will finally bring to a close more than a year of work in this Chamber, and I should like to highlight Mr Fruteau’s constructive approach, and express my backing for his reports. Rather than being the end of the road, however, this moment marks the start of a process of development in the sector.

Turning to you, Commissioner, I should like to say that the trend towards viewing the market as the be-all –and end-all has had devastating consequences, although we have helped somewhat to mitigate those consequences. If such a reform is, rightly, deemed inevitable, that is already cause to be wary of its effects. This is because, since the positions of the Council and Parliament came closer together, it has revolved around a drastic price cut of 36% in four years. Deregulation via price works in the interests of the large producers, which can continue to grow to the detriment of the environment and exploit even further an under-paid workforce outside Europe. It is also in the interests of the major users, who will buy sugar a great deal cheaper on the world market without this being reflected in the price of the end product, thereby maximising their profits. That is their definition of development, not to be confused with our concept of development.

On the other side of the coin, deregulation via price is damaging to the small producers here in Europe and, even more so, in the ACP countries and the least developed countries, who will sell their sugar for less and may even have to stop producing, without any viable alternative source of income. Nor will this be of benefit to small consumers: there are strong indications that they will not be paying any less. In Europe, moreover, some countries will stop producing and others will carry on with some difficulty, both for producers and for firms and their employees.

I should like, if I may, to introduce a particularly Belgian flavour at this point. I would welcome the possibility of restructuring in the chicory sector with a view to producing inulin, for which prospects are good. I tabled some amendments in this regard and I thank you, ladies and gentlemen, for accepting them. With regard to the Council, which is set to meet in February, I hope that greater prominence will be given to the amount of aid earmarked for farmers and to the conditions that firms seeking restructuring aid need to meet. I shall be keeping a close eye on this.

  Luciana Sbarbati (ALDE). – (IT) Mr President, ladies and gentlemen, the agreement on the sugar COM has been called a historic agreement and a brave and bold decision on a situation that has remained crystallised for too many years. It has been said that action was needed today because it implies being able to find the necessary funds to carry out this painful but absolutely essential restructuring and to guarantee not only compensation for the farmers concerned, but also the long-term sustainability of the sector. This new policy will encourage trade and will strengthen the European Union’s negotiating position at the WTO meeting to be held in Hong Kong next month.

With this reform, the European Union will certainly be an attractive market for developing countries, to which they can export their sugar, although I personally believe that we shall lose a great deal in terms of quality and consumer health guarantees. In this respect, Commissioner, perhaps we need to take a tougher, more prudent and more cautious line. Lastly, this agreement will enable the European Union to offer its ACP partners financial assistance to adapt to the changes, but it will certainly end up simply protecting France and Germany, as always.

While expressing my great appreciation for the work done by the rapporteur and the Committee on Agriculture and Rural Development, I do not wish to linger over the terms of the agreement, which are now familiar to everybody. Once again, however, I must point out the extent to which the role of the European Parliament has been undervalued, in that all too often it has been bypassed by the Council and by the Commission itself.

While hoping, therefore, that the amendments to improve the text are accepted, I want to say how baffled I feel, since there has been no attempt at all to take a bolder stand on the CAP in order to ensure that the European Union has the energy independence that it needs, by focusing on alternative energies or energies integrated with oil, such as energy from biomass, as Professor Prodi maintained as well.

By transforming biomass, we can achieve earnings that far outweigh the losses on sugar. Is the Commissioner aware of that? Is the Commission? I believe it would be worthwhile for the European Union to invest in the biomass transformation sector which, incidentally, is a technology that produces hydrogen directly. Two tonnes of dry biomass, in fact, produces the same heat as one tonne of oil, but while the potential cost of biomass is EUR 200 per tonne, oil costs about EUR 400 per tonne. Let me give you an example: Italy would save about EUR 12 billion and Europe EUR 120 billion. With that we could implement a policy that combines the goals of reform with those of social justice in the best way possible and without unexpected and excessive trauma. We could adopt proactive, positive measures for the environment, for farmers and for the producers themselves, without promoting a benefit culture and, what is more, without losing jobs.

  Zbigniew Krzysztof Kuźmiuk (UEN).  – (PL) Mr President, today we are debating three reports tabled before Parliament on the reform of the sugar market. As a representative of a new Member State, Poland, I should like to raise two grave concerns about this reform.

Firstly, the reform has been made necessary by the excessive amounts of sugar exported by two countries in particular, namely Germany and France. These exports amount to nearly 2 million tonnes, and it is France and Germany that should bear the cost of this reform by significantly reducing the amount of sugar they export. Since Poland exports a mere 90 000 tonnes, it can only limit its production within these constraints.

Secondly, sugar production limits have been imposed on sugar factories rather than on farmers in Poland, unlike in other EU Member States. The majority of sugar factories in Poland were bought out by German and French investors, who paid around EUR 200 per tonne of production limit. Given that they will be compensated to the tune of EUR 730 per tonne of abandoned production, the owners of such factories will receive nearly four times more than they paid. What is more, they will still own the industrial assets, or in other words the buildings, land and machinery.

I should like to address these two grave concerns to the Commission and to the Council, as well as to the Commissioner, who is present in the Chamber today. All of these latter believe that they have come up with a first-rate idea for a reform of the sugar market.

  Duarte Freitas (PPE-DE). – (PT) Mr President, ladies and gentlemen, Commissioner, we all agree that the sector needs to be reformed in order to make it sustainable, in line with the latest reform of the CAP and with the EU’s international obligations. Despite these new objectives, however, the reform proposed by the Commission would cause serious problems for Europe’s farmers, not least the swingeing reduction in the price of sugar.

I therefore endorse Mr Fruteau’s report, along with the work carried out by the various political groups in the Committee on Agriculture and Rural Development, which I feel sends out a very clear message to the Commission and the Council. In addition to the capping of price reductions to 30% in the common organisation of the market in sugar, I wish to highlight Amendment 3, on support schemes for farmers, which refers to the possibility of Member States continuing to enjoy production-linked subsidies, at least to some extent. This will help prevent the rapid disappearance of the sugar sector in the regions most under threat from this reform. I would say, however, that the Commission’s proposal was drawn up more from the point of view of the processing industry than that of agricultural producers, and more from the perspective of the interests of the major surplus producing countries than that of the smaller countries which do not even produce enough sugar beet to satisfy consumption, as in the case of Portugal.

The mainstay of sugar beet production in Portugal is a factory that produces some 70 000 tonnes of the 300 000 tonnes consumed across the country. In other words, it is not countries like Portugal that are unbalancing the international market with surplus production. Nevertheless, by safeguarding the possibility of the restructuring fund supporting those giving up on part of the quota, we will be helping the sugar industry in some countries, such as Portugal, and shifting it away from the agricultural sector towards sustaining the processing side of the industry.

Lastly, I should like to express my objection to the way in which the Council has approached this subject, from an institutional point of view. It does not matter how many times we hear that what we have is a political agreement and not a formal decision, the truth is that at a time when Europe’s citizens have expressed their concerns about the amount of transparency in the European institutions, this is not the best way to move forward. It is not simply a matter of following the interinstitutional agreement to the letter. We also have a duty, as politicians directly elected by the citizens of Europe, to demand respect, both ethically and politically, for the institutions.

  David Martin (PSE). – Mr President, I welcome Mr Fruteau's reports and I would also pay tribute to the way he has gone about his work. It would be fair to say that we do not have identical views on the reform of the sugar regime, but I would like to think that we are now much closer at the end of the process than we were at the beginning.

Like the rapporteur and previous speakers, I think it is a pity that the Council chose to reach a political agreement in advance of the debate in this Parliament. I think it shows a lack of respect for this House. Nevertheless, I welcome the fact that the Council has recognised and supported the need to end the artificial support for the sugar sector and to make the European sugar regime more competitive in the world market, and I believe that the 36% reduction will make us WTO-compatible. It is not as radical as the 39% that the Commission proposes, but I think it brings us into line with WTO rules. The four-year implementation that the Council also recommends gives our producers a chance to adjust to the new realities.

Where I would like to see more action is in two specific areas. Firstly, in relation to C sugar. We should have a clear commitment to abolish C sugar, which clearly distorts world trade and could still be a subject of dispute at the WTO level. So I shall support Amendment 80 on Thursday, as I hope will the House.

I warmly welcome the EUR 7 billion compensation that has been given to European producers and I recognise that they need that support. However, like other speakers in this debate, I regret that we are not being as generous to ACP producers. The 18 ACP producers currently have stable earnings of around EUR 250 million a year from the sugar regime. The Commission proposal was for EUR 190 million a year between 2007 and 2013, which was good but not generous enough. The problem is that the Council agreement of 16 and 17 December does not meet the EUR 190 million that the Commission proposed, and as the budgetary authority in this, along with the Council, Parliament must press for EUR 190 million a year, if we are to be seen as genuine about our Millennium Development Goals objectives.

Finally, I would like to add my voice to those who say that using sugar as a biofuel is a potential way forward and a potential new market for sugar. The technology exists; it needs to be improved and adapted; that needs research and technical support, and I hope the Commission will look again more generously at that aspect of reform and do more to assist the wider use of sugar, both as an environmental measure and as a way of compensating European sugar producers for the loss of revenue they face from these proposals.

  Mairead McGuinness (PPE-DE). – Mr President, I thank Mr Fruteau, not only for his work to date, but also for sticking with this marathon session; and I also thank the Commission. I think we should all get a clap on the back. Rather than repeat some of the comments made about these reforms, I just want to say that I have some concern about the severity of the price cut. I have urged this before, as an alternative to using a quota cut as a mechanism to control supply.

I have particular questions for the Commission. Perhaps the Commissioner could give me an answer. In relation to the levy to be deducted from processors, could the Commission say whether, if a country – and I am speaking of Ireland – grows beet in 2006, the company has to contribute to the restructuring levy this year, should it intend to stop production in 2007? It is a crucial issue and it will decide whether or not we grow beet this year – perhaps the last season for beet growing in Ireland.

My second question relates to a comment the Commissioner made earlier in the debate when she said that the 10% which is being set aside under the restructuring scheme for growers could be increased by Member States in particular circumstances. Perhaps the Commissioner might outline what those circumstances might be.

Without using all of my time, because we may all be tired and perhaps emotional, I shall just say, with regard to the developing world – and I share the concerns of others here in the House – that in reforming sugar we have upset the developing world, because we are offering it access to our markets at much reduced prices. What it wants is access at high prices, because that is the only way that it can grow and prosper. Those who have called for this to happen should think about what they have now succeeded in achieving.

Lastly, I hope the reforms do what the Commissioner says they will do: give us a competitive sugar industry. Alas, I think that for Ireland it will mean that we will have no industry at all.

  Heinz Kindermann (PSE). – (DE) Mr President, Commissioner, the rapporteur, Mr Fruteau, deserves thanks for his committed work, which enabled the achievement of what was, after all, an acceptable compromise. He was not helped, of course, by the fact that the Agricultural and Fisheries Council had taken a preliminary decision. Although we do not have power of codecision in this field, this decision can only be tolerated in the light of the 2005 WTO negotiations.

The compromise that has now been reached remains a tremendous challenge for those affected: within the EU as well as the ACP and least developed countries. Even though the affected parties will receive compensatory payments, there will be losses of income one way or another.

In future, many sugar-beet-growing regions in the EU will not be able to grow as much sugar beet for food purposes or, in some cases, any at all. The Commission should follow the lead taken by the Committee on Agriculture and Rural Development in this regard and examine the possible scope for increasing the funds per hectare available for non-food crops.

In my view, the key proposals of the Agriculture Committee are similar to those of the Agricultural and Fisheries Council. I hope that the compromise is adopted in the end, as it will give beet growers planning security and enable sugar-beet production in the EU to continue in future in spite of severe cuts.

Sugar-factory operators also share responsibility, however. Their task is to implement the regime of the future market organisation in such a way that viable socio-economic solutions can be devised in cooperation with the trade unions and staff representatives.

  Hynek Fajmon (PPE-DE).  – (CS) Ladies and gentlemen, as you are no doubt all aware, sugar cubes are a Czech invention, and so as a Czech MEP I should like to make a number of comments on the proposal to reform the Common Organisation of the Market for sugar, if I may.

The first comment I should like to make is that I welcome the attempts of the European Council and of the European Commission to reform the EU’s sugar policy. The policy as it stands is utterly ludicrous and costs taxpayers and consumers too much. This state of affairs must change as soon as possible and the market as a whole must be deregulated and liberalised.

Secondly, the fact that the sugar regime is being reformed only after the EU’s policy was ruled unfair by the World Trade Organisation is deplorable, and everyone in the EU should spend some time reflecting on it. Why are we incapable of liberalising our own markets, and why do we have to be forced into doing so by other countries? After all, free trade and free markets have brought nothing but prosperity to the European nations throughout their history, whereas economic protectionism brings nothing but poverty. Yet it would appear that advocates of protectionism are well represented in this House. I am fundamentally opposed to their views and I will not vote in favour of their amendments. The sugar regime must be reformed as soon as possible.

The third point I should like to make relates to the fact that a sugar refinery operated in my home town from 1890 until 1994. The reason it went bankrupt was the opening up of the sugar market after the fall of Communism in my country. The sugar refinery in my home town of Lysá nad Labem went bankrupt because it was unable to compete with the subsidised sugar refineries in the European Union. In the course of the 1990s, more than 50 sugar refineries in the Czech Republic went bankrupt or were closed down for this reason. The people who worked in them lost their jobs and received no compensation, and the refinery owners and sugar beet farmers received no compensation either. It is now the turn of the sugar sector in the old EU Member States to undergo the same process of market adjustment. The compensation that has been proposed is extremely generous, which should make such adjustment a simple task. I am therefore in favour of the reform of the sugar regime, and indeed I believe that it could go further. Our experiences in the Czech Republic show that such a reform is both feasible and manageable.

  María Isabel Salinas García (PSE). – (ES) Mr President, I would like firstly to highlight the efforts made by the Committee on Agriculture and Rural Development in order to be able to reach an agreement amongst all of the political groups, which is not at all easy given that the Commission’s initial proposal was aimed more towards the disappearance of sugar cultivation than its reform, without taking account of the resulting social cost. I therefore believe that this intense year of work has been worthwhile.

Secondly, I would like to congratulate the rapporteur, Mr Fruteau, whose three regulations have incorporated moderation, balance, solidarity and, above all, a realistic approach to the future of the sector, not just the 21 European Union producer countries, but also the ACP and least-developed countries.

I would also like to add my voice to the many criticisms heard in this House at the fact that the Council should adopt a political agreement without awaiting Parliament’s report. We hope that this will not have set a precedent for future reforms.

Finally, after so much work, I would like to refer to the double speak that some Members have been indulging in from the outset – I feel that I should point this out now that we have come to the end – voting in favour of the Fruteau report in the Committee on Agriculture and Rural Development and then, when they get back to their country, criticising everything about it. Some of us have been working to reach agreements, to bring positions closer together, in order to achieve what in the end has become a reality. Despite everything, we believe that the current situation is much better than the situation at the outset; we do not like the reforms, we have never liked them, but we must recognise that we have improved on the difficult initial situation.

I believe that this is the moment to send a clear message from this European Parliament. Ladies and gentlemen, it is always better as a rule to build rather than destroy. It is preferable to do things with an eye to future generations rather than to the next elections, because we will always be proven right in the end and the strategy of confrontation without arguments which has taken hold in my country will not bring about any positive solution.

I shall end by calling on Parliament to support the Fruteau report, which is a good report and which may improve the Council's agreement, and, if it is strengthened by this Parliament, we will be able to move forward towards a better future for the sector.

  Ioannis Gklavakis (PPE-DE). – (EL) Mr President, Commissioner, the new sugar regime being outlined will be particularly unfortunate for growers. In many areas this means an end to the cultivation of sugar beet. The closure of sugar factories will send farmers and industrial workers into unemployment. Unfortunately, the first demonstrations have already started in my country.

We must set as our objective the survival of our farmers on their farms. We do not need any more urban drift. If we want to replace sugar beet with energy crops, we must be more generous with our aid. Besides, we owe it to the environment, because energy crops mean that we are protecting the environment, although the ACP countries will not fare better in the future under the new regime.

Commissioner, you are a sober, honest and able person. You work with Mr Fruteau, who has made very good proposals, you work with the chairman of the Committee on Agriculture and Rural Development, Mr Daul, you make improvements, you make brave proposals, you demonstrate to those who criticise you that you are not here as a formality and that everything has been decided, but that you want – truly and constructively – to listen to Parliament. In this way you protect the European Union, the European Parliament and European agriculture.

Otherwise, in many disadvantaged areas of Europe we shall see farming disappear, villages abandoned and the ecological deterioration of Europe. For heaven's sake, I do not think that is what you want.

  Thijs Berman (PSE). – (NL) Mr President, sugar reform is first and foremost a social problem for farmers and workers in Europe and in the developing world. For social justice to be successful on a world scale, the European market has to be opened up. This reform is inevitable and painful, but if you have to jump through fire, you may as well make a good job of it. The Commissioner succeeded in making an enormous leap, the Council managed a smaller jump and this House would like to take a somewhat smaller jump still.

Workers and farmers are worried, though, and are right to demand strong social guarantees. In that sense, the restructuring fund is vital. Thanks to the pressure we have exerted, we now have a bigger restructuring fund, which is important. We would like the fund to grow even more, for workers want more than retraining. They want alternative employment when their factories close down.

Bio-ethanol is a solution, provided it can be produced using low levels of energy. More funding is needed for research into this. Only in that way is a social and sustainable future for the sector possible. Only in that way can the sector accept this reform.

  Margie Sudre (PPE-DE). – (FR) Mr President, Commissioner, ladies and gentlemen, for a change, I should like to speak in favour of the current process of reforming the common organisation of the market in sugar, albeit with a very specific eye on sugar in the outermost regions.

While the EU is committed to cutting back sugar production to bring it into line with world trade rules, the French overseas departments are on a diametrically opposite course, which consists of further increasing production in order to ensure that sustainable jobs are maintained and created, and that the fragile balance of both farming and industrial operations is preserved.

As regards the Commission’s proposals, it can be said that Réunion, Guadeloupe and Martinique are pioneers in adapting their sugar cane sector. This is firstly because their level of production have remained well below authorised quotas, and they are thus not part of Community overproduction, and secondly because, in the past thirty years, factories have gradually merged. Accordingly, it is no longer possible to envisage either stopping or cutting back activities without upsetting the whole balance of the sector.

Sugar cane has become a valuable commodity, capable of producing not only sugar but also energy, using bagasse or indeed natural manure. In the overseas departments, multifunctionality in agriculture is not merely some theoretical project, it is a reality. Moreover, it is precisely because they were pioneers that the overseas departments cannot go any further.

Whereas the Commission and the Council have refused any further financial concessions to the departments, France has been authorised to implement provisions paving the way for state aid to be granted, in addition to the Community funds, via the political agreement in the Council ahead of the WTO summit in Hong Kong.

There could be compensation for price cuts, with some leeway for increased production, which would return some sense of stability and visibility to a sector that has endured two years of uncertainty.

I should like to congratulate the rapporteur, Mr Fruteau, on his efforts and would formally ask you, Commissioner, to retain the provisions in the Council’s compromise on sugar in the overseas departments in order to ensure the sector’s future.

  Iles Braghetto (PPE-DE). – (IT) Mr President, Commissioner, ladies and gentlemen, sugar reform was one of the most complex Community policy dossiers. Before finding political agreement, the Council should have taken Parliament’s opinion into consideration, in order to strengthen cooperation among the European institutions and to provide solutions commensurate with our expectations and the impending challenges. The outcome that has been achieved is, however, positive and moderately satisfying. I believe that Parliament’s contribution to the establishment of the compromise was vital.

The own-initiative report adopted by this House last March provided a number of decisive pointers for drawing up the new proposal. The emphasis that this House placed on the social impact of the reform, with the establishment of a restructuring fund for the industry, is an essential part of our position which has been taken up in the agreement. It is certainly a painful reform, but it is inevitable if Europe is to meet its international commitments and at the same time ensure that the sector has a sustainable, competitive, long-term future.

The compromise that has been reached is much more balanced than the Commission’s proposal in June and it provides for a series of positive measures: the chance to retain a proportion of coupled aid for those who continue producing; the support measures for sugar beet growers; the attention given to the regions penalised by the dismantling of the industry; and the creation of a diversification fund. The reform thus avoids totally abandoning production and its social and employment repercussions will be much less disastrous than we feared.

  Jan Březina (PPE-DE).  – (CS) Mr President, Commissioner, this is not the first time that Parliament has made known its opinion on the reform of the sugar regime. I was one of the Members who voted in favour of the resolution we adopted last year. Among other things, this resolution called for the quota reduction measures to be reconsidered, in particular in the case of the new Member States. I am delighted that the Commission has revised its original strategy and proposed a reform based on a reduction in the guaranteed price of sugar that will meet competitive sugar producers and sugar beet farmers halfway. I have certain reservations about the report we are discussing today, however, since it calls for a smaller reduction in the price of sugar than that to which the Member States agreed in December. This agreement itself was the result of a compromise that was achieved by toning down the harder-hitting proposal by the Commission.

Firstly, it should not be forgotten that we suffered defeat at the hands of the WTO. We must therefore meet the requirement to open up our sugar market by 2009. In this connection, I can only wonder at the exaggerated amount of attention being paid to the interests of the least-developed countries. On the one hand, these countries would like the price of sugar to be reduced in markets outside Europe, but on the other, they want prices to remain high on the European market, to which they have privileged access.

Secondly, I should like to stress that reducing the price of sugar over a longer period would work to the advantage of less competitive businesses, and help perpetuate distortions in the sugar market. It would not only be competitive sugar producers who would lose out, but above all European consumers, since they would be the ones paying most of the cost – quite literally – of a more moderate fall in prices. At present, they have to pay three times more for sugar than consumers in other parts of the world. Is it acceptable for them to continue subsidising an extensive protectionist system every time they buy a product containing sugar?

We should remember that the main purpose of the European Union is to remove barriers to mutual trade, not to perpetuate and strengthen them. We should therefore prove that we are a truly European Parliament, and that we are not afraid of implementing market mechanisms, inter alia in the fields of sugar production and sales.

  María Esther Herranz García (PPE-DE). – (ES) Mr President, the political agreement reached by the Agriculture Ministers − including the Spanish Socialist Minister, for which she should have been dismissed − will undoubtedly be adopted at the end of the month among points A of the agenda, that is to say without any debate whatsoever. There is no need, everything has been debated.

Unfortunately, the discussion we are holding today in the European Parliament will have no impact on the final decision. In the future, we must prevent Parliament's voice from being ignored again in such a blatant manner, particularly on decisions with such significant economic and social importance. To this end, however, the European Commission must not use any excuse it likes to ignore the opinion of Parliament, as it has done on this occasion.

I would like to make it clear, in case there is still any doubt, that this report, which will be put to the vote on Thursday, is a very long way from the political agreement reached by the Member States, with regard both to sugar prices and to compensation for farmers or the Member States' freedom to maintain part of the coupled aid, which in the agreement amongst the 25 in the Council is not taken up. Parliament’s report distributes the efforts for reducing production in a fairer manner, by removing the additional allocation of a million tonnes previously known as ‘C’.

These are just a few of the examples that we may find if we compare the different texts, but the list would get very much longer if we were to carry out a detailed analysis of the agreement.

In short, we do not like the reform, we did not like the European Commission’s reform because it was horrible. Nevertheless, the agreement that is going to be voted on in this Parliament on Thursday seems to us to be the least bad option.

  Mariann Fischer Boel, Member of the Commission. Mr President, I have listened carefully to the debate. Its intensity is a sign that quite a lot is at stake. However, it is also a sign of the commitment with which you have engaged yourselves in the process of making this new reform.

Let me first deal with the amendments. I believe that I have found in them a lot of common ground with my own views. I shall start with the proposed new common market organisation. You have argued that the safety net is necessary during the restructuring period ending in 2009-2010 in order to limit undesirable market disturbances. I can accept that. I can therefore endorse the substance of Amendments 2, 29 and 54.

In order not to encourage overproduction and subsequent building-up of stocks, it will be necessary to set the intervention price at a level considerably lower than the reference price of the following campaign. Intervention will also have to be limited to a certain maximum quantity. Finally, I think that during the restructuring period we need to dispose of all management tools, including private storage.

You also argue that as long as our international commitments are respected some quantities of quota sugar should or could be exported. For the sake of the market balance, this is an idea that I can live with and thus I accept in principle Amendments 20, 39, 49, 51 and 68.

Many of you have mentioned bioethanol. I share your analysis that future energy production could become a major outlet for Community beet. Along these lines, I can support Amendments 11 and 42, raising the political profile of bioethanol in the reform package.

As you are aware, the Commission is working on a whole set of political initiatives. On 1 February we shall adopt a proposal on the promotion of biofuels based on agricultural raw materials. I am also aware that Mr Parish is currently working on a Parliament resolution on exactly the same subject. I think we need to take this debate when these contributions have been adopted, rather than to take it now within the context of the sugar reform. I must underline that I am very interested in coming back to this debate as it is very important.

I share the view that we need to address the specific problem arising for those growers who practise autumn growing. This is specifically a problem in the Mediterranean countries. That would require a provisional extension of the quota without restructuring levy for the marketing year 2006/2007. The Commission can thus agree with the principle of Amendments 23 and 69.

I can share your concerns as regards the income of beet growers, and consent to the relevant part of Amendment 31 concerning the removal of the additional 10% flexibility for the sugar price.

On industrial sugar, I can accept the substance of Amendment 43. Strict and complex rules that are difficult to monitor should be avoided.

There is also a series of technical amendments that were already accepted in the technical discussions on the Commission proposal. Other amendments cover minor issues that could better be settled in the framework of the implementing rules. I am not in a position to accept the other amendments on the reform of the COM.

Let me now move to the draft regulation amending Council Regulation (EC) No 1782/2003 establishing common rules for direct support schemes. I can support the principle of increased flexibility for Member States in the context of the compensatory payments and therefore accept the substance of Amendments 5, 6, 8 and 11, adjusted as necessary.

Building on my vision to underpin the development of bioethanol production in the Community, I can also live with the notion of Amendment 7, whereby sugar beet for purposes other than sugar production could be grown on set-aside land.

Amendment 4 and Amendment 13 present a compensation system based on the amount of sugar produced from beet from each individual farmer. I am in favour of the proportionality principle of this reform, for instance, by advancing higher levels of compensation to Member States facing severe reductions on their quotas. However, the draft report proposes a system that would differentiate payments based on the volume of the sugar beet produced. Such a system would create enormous practical difficulties for a very limited added value, which would go against the shared objective of simplification, and I therefore cannot accept it. Nor can I accept the other amendments.

Finally, let me refer to the draft regulation establishing the restructuring funds. I can endorse the idea underlying Amendments 4 and 14, whereby beet growers can benefit from a part of the restructuring aid. However, given the very different conditions faced by Member States, a minimum of 50% would be too high. Let us not forget the many obligations that need to be dealt with through this restructuring fund. There are some environmental, and some social obligations that are very important. If we were to impose a minimum of 50%, there would be cases where we would have difficulty in meeting these different obligations. Therefore I cannot accept it.

As mentioned already in my opening statement, a minimum of 10%, with the possibility for the Member States to increase this percentage, seems much more appropriate. Mrs McGuinness, this is addressed specifically to you: I would never dare interfere in the decisions taken by the Member States to decide at what level they would agree on this compensation percentage.

Likewise, I can support the principle set down in Amendment 5, and the relevant part of Amendment 10, relating to the extended flexibility for industries ceasing sugar production and moving to alternative sectors, such as the production of bioethanol. The same applies to the notion of the partial quota surrender which is in Amendment 7.

The social element is already well covered in the proposal and additional administrative requirements would only slow down the restructuring process. Therefore, I am of the view that Amendments 6, 9 and the relevant part of Amendment 7 should not be accepted.

Some last-minute amendments have also been tabled. I am positive about the idea of Amendment 17. Sugar beet growers who continue sugar beet production in Member States which significantly reduce their sugar quota should be eligible for some kind of state aid for a transitional period.

The proposed amendments to which I have not referred are of minor importance and for technical reasons I do not consider it necessary to take them on board. This also includes the last-minute amendments tabled last week.

I took note of the particularly harsh comments that were made concerning the treatment of the ACP countries. Indeed, this has been the subject of very intense discussion, but we have not forgotten the ACP countries. The foreseen price cut only kicks in for the ACP countries in 2008, two years after it is imposed on the European farmers. Let us not forget that after the full implementation of the reform, the ACP countries will still benefit from a price that is twice as high as the world market price.

The Commission has always proposed an action plan for the ACP countries, with EUR 40 million for 2006. These funds are expected to be at their disposal in 2006, even if the prices are not lowered until 2008. Funding of EUR 40 million is certainly not a lot, but it is enough to get started and it has always been the intention to provide significant additional funds for the remaining period from 2007 to 2013. It is quite clear that the size of these funds will depend on the ongoing discussions on the financial perspectives.

The reform also introduces a number of obligations for undertakings that want to take up the restructuring fund. I must say that I am sorry and disappointed that quite a lot of Members – among others the Polish Members – are obviously unable to be here, because it must be completely clear that sugar companies cannot, I repeat, cannot, just take or cash in the restructuring fund and leave the country. They simply have to provide measures for employees in the sugar industry. These rules apply to training or early retirement, or what you will. This money is going to be spent in cooperation with the government. There seems to have been a complete misunderstanding about these restructuring funds.

I can answer Mrs McGuinness' question on the levy, which is: yes, the only way to avoid this payment to the restructuring fund would be to do away with the production in 2006/2007.

Lastly, some Members criticised the fact that the Council agreed on a political line for the sugar reform on 24 November 2005. The definition of a political line at the November Council was driven by exceptional circumstances. The current regime remains applicable only during the ongoing campaign and our growers and operators face some very difficult choices. We owe it to them to provide, in a timely fashion, acceptable conditions in which they could make those choices.

We have lost in the WTO panel on sugar, and compliance with the panel's conclusion is a matter of urgency. Finally, we had to prepare for Hong Kong in order to be able to defend our sugar sector, and we therefore needed to know what we had to defend.

However, I must emphasise that these circumstances should not have come as a surprise to anyone. Since I presented my reform proposal before this Parliament on 22 June, I made it absolutely clear that the Council would have to define its political line on the sugar reform at the November Council. I repeated this when I appeared before the Committee on Agriculture on 13 September 2005 and when I wrote a follow-up letter to all the members of that committee on 26 September 2005. I have operated in full transparency throughout the process to allow Parliament to play its role to the fullest.

But, finally, let me say to those of you who are critical here today that we owe much credit to the many committees and members of this House who have provided very valuable input over the last 12 months. The reality is that you have managed successfully to influence the shape of the reform – a reform that will secure sustainability of this sector in Europe and a reform that allows us to offer a real alternative to those farmers and to those regions that will be most affected by the restructuring. That is the result and it is a good one.

  President.   The debate is closed.

The vote will take place on Thursday at 12 noon.