Local view for "http://purl.org/linkedpolitics/eu/plenary/2005-03-10-Speech-4-012"
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"en.20050310.3.4-012"2
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"Mr President, I should like to begin by thanking Mr Daul, Mr Fruteau and the members of the Committee on Agriculture and Rural Development for all the work they have done. The drafting of the resolution and the hearing on 30 November last year make valuable contributions to our thorough preparations for this important reform of the common organisation of the markets in sugar. Allow me to make a few introductory remarks before responding to your questions.
Let me be very clear on the ‘Everything but Arms’ – EBA – initiative, which is one of the cornerstones of our trade relations with the least-developed countries, the LDCs. It was the result of an unprecedented unilateral concession made by the European Union, and a logical step given our commitment to the development of these countries. It would be a wrong signal to roll back our privileges to the LDCs, particularly in a year where we are trying to convince the rest of the developed world to follow our example and increase market access to developing countries. I am therefore against a renegotiation of the EBA initiative. Furthermore, a system with regulated imports at remunerative prices would lead to a price reduction which is too small and thus inefficient. We should not give incentives for unsustainable investments within the EU or in Third World countries.
We recognise that the sugar reform will imply certain adjustments of the sugar sector in the ACP countries concerned, but we have also clearly indicated that we are prepared to accompany this process. On the basis of an action plan the Commission presented on 24 January, a dialogue with the ACP countries is currently taking place. It is the Commission’s intention to submit the final action plan on accompanying measures in the form of a communication to the European Parliament and the Council in mid-2005.
The last point I want to address is the WTO. The final ruling of the WTO Appellate Body is fixed for 28 April 2005. Our reform proposal will take due account of its outcome, and with that we will have brought the common market organisation for sugar into line with our existing WTO obligations.
Let me conclude with the timetable. For internal and external reasons I consider it absolutely necessary to reach an agreement on the sugar reform by November at the latest. In fact, the current sugar regime expires on 1 July 2006. The sector has to know sufficiently in advance what the new sugar regime looks like in order to make their decisions for the common marketing year 2006-2007. Furthermore, we have a clear interest to indicate to our WTO ministerial partners, before the conference in December this year, what the basic elements of our sugar reform are. Otherwise we run the risk of the sugar issue spoiling the Hong Kong meeting in the same way that cotton did the Cancún meeting.
The UK presidency has scheduled discussions in the Council in order to reach final political agreement in the November Council. To meet this timeframe I will present the legislative proposal to the European Parliament and the Council by the summer. I know that I can count on your cooperation to make this timetable possible.
The need for reform of the sugar sector is inevitable. Based on the consultations I have had with stakeholders in recent months, it is my clear impression that this view is widely shared. The question is ‘how far’ and ‘how fast’ we should move. I sincerely believe that we need an ambitious reform.
I should now like to make a few comments on the major issues you raised in your resolution.
With regard to price and quota cuts, I am convinced that there is a future for sugar production within the European Union, but that it must be based on competitiveness. We therefore need to accept that sugar production should be concentrated in the areas where it has a sustainable long-term perspective.
The price cuts proposed in the communication will keep us well below current world market prices. I am therefore convinced that the proposed 33% price cut and the 2.8 million quota cut are a necessary minimum to achieve an effective reform, balance the market and respect our international obligations. The less thorough we are now, the more likely it is that we will have to reform again in the near future, with ensuing uncertainty for the sector.
It is clear that the reform will force farmers and producers to take important, and sometimes difficult, decisions about their future in the sector. We have to offer them a clear outlook. I therefore consider predictability to be a key issue. I have taken good note that this is a concern shared by Parliament. I therefore do not intend to include the idea of a mid-term review in two or three years in the legislative proposal. Instead, a long-term perspective will be offered.
Farmers will receive compensation equal to 60% percent of the reduction in the institutional price, through the single farm payment scheme. This will offset the loss in revenue. Past experience shows that income loss at farm level does not equal the price cut. That is especially true for sugar, where the farmers will no longer carry the cost of the production levy. In any case, the reform needs to be budget-neutral, which limits the degree of compensation. If we go beyond 60% then other sectors will have to pay, through a reduction in their direct payment.
With regard to the quota transfer between Member States, the communication introduces this as one of the key elements in driving the necessary restructuring within the sugar industry.
Quota transfers could facilitate production moving to regions where the production conditions are best, and at the same time provide regions that are not competitive with an opportunity to give up their quota and invest the proceeds in alternative economically viable activities. Your concerns about the quota transfer have not gone unnoticed. If our objectives can be achieved through alternative instruments then that deserves thorough consideration. I have been particularly interested in the ideas put forward in the resolution on making the transfer subject to some degree of control by Member States and farmers, and on the setting-up of a special fund. I am currently exploring those ideas. The creation of a specific fund forms a particularly important element of my reflections."@en1
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