EU to revamp sugar subsidies

The European commission is set to propose a shake-up of its sugar subsidies programme in an attempt to reduce the size the industry.

Brussels officials are preparing a proposal set to be tabled to agriculture ministers on May 7 to cut down the numbers of sugar refineries and sugar beet farms in Europe.

Commission officials say that the current reforms - agreed by EU ministers in 2005, under pressure from the World Trade Organization - are not delivering quickly enough.

The EU has been paying the sugar industry a subsidy for each tone of sugar that it removes from the market.

The subsidy for the industry started at €730 in 2005 and decreases annually to €520 in 2009, with sugar beet farmers receiving a round €73 to €105 per tonnes removed from the market.

Brussels hoped that the payments would help induce farmers and sugar refiners into switching to other crops, and would help clear four million tonnes of excess sugar from the EU market.

But two years on, the EU executive is worried that too many sugar refineries and beet farmers are still operating in the EU.

The new rules, yet to be agreed, will aim at making the switch “more attractive” to farmers and refiners, a commission spokesman told this website.

Under the draft, seen by Spanish newspaper El Pais, pay-offs to farmers will triple.

Commenting on the proposals EU sugar lobby CEFS called for farmers to receive “a reasonable top up aid”.

A solution they argue could be to encourage sugar factories to transform into biomass plants while still keeping their subsidies.

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