1. The EU Sugar Sector Reform
Restructuring Fund
Brussels, 30 June 2006

2. Why a reform of the sugar sector was necessary
Sugar consumption in the EU remains relatively stable at around 16 mio tonnes
EU production is around mio tonnes, of which 17.4 mio tonnes quota production
High EU support price attracts increasing levels of imports (mostly from EBA countries,+3.3 mio t), fuelled by the “swap” effect
Under the WTO ruling, as from 2006/2007, Exports with refunds will be limited to 1.37 mio t and 513 mio Euro
Automatic quota cuts (declassification) reduces EU quota relatively more in the most competitive regions
Non-competitive regions suffer gradual decline without any incentive to seek an economic alternative

3. Key elements of the Sugar Reform – internal market
Reduction of the reference price for sugar and the minimum beet price
Restructuring fund to allow least competitive producers to stop production

4. Temporary Restructuring Fund
Timeframe: 2006/ /2010
Elements:
Restructuring amount (levy)
Restructuring aid
Aid for Diversification
Additional Aid for Diversification
Transitional aid to full-time refiners
Transitional aid to certain Member States

5. Restructuring Amount
To be paid by sugar and inulin producers per tonne of quota:
2006/2007: EUR
2007/2008: EUR
2008/2009: EUR
Isoglucose producers pay 50% of this amount

6. Restructuring Aid Full Dismantling (100%) Partial Dismantling (75%)
Quota Renounciation
(35%)
2006/2007
EUR
EUR
EUR
2007/2008
2008/2009
EUR
EUR
EUR
2009/2010
EUR
EUR
EUR

7. Application for the Restructuring Aid
Restructuring Plan
Commitment to renounce quota
Actions foreseen
Aid to growers and/or contractors (min10%)
Social and Environmental Plan
(additional national requirements)
Consultation with growers

8. Granting of the Restructuring Aid
First-come-first-served order of complete applications
Member State decides on eligibility
Commission decides on granting of the aid on the basis of financial resources

9. Payment of the Restructuring Aid
40% in June of the marketing year concerned
60% in February of the following marketing year
Against the lodging of a security of 120% of the amount
The amount for growers and/or contractors has to be paid from the first instalment

10. Aid for Diversification
Granted to Member States for diversification measures in regions affected by the restructuring of the sugar industry
Amount per tonne of quota renounced:
EUR in 2006/2007
EUR in 2007/2008
EUR in 2008/2009
EUR in 2009/2010
Member State establishes national restructuring programmes

11. Additional Aid for Diversification
The total amount of the aid granted to a Member State is increased by:
50% once 50-75% of the national quota has been renounced
another 25% once % of the national quota has been renounced
another 25% once 100% of the national quota has been renounced
The Member State decides if the aid is granted for diversification measures and/or to growers in the region concerned

12. Transitional Aid to full-time refiners
EUR 150 million to: UK (94.3), FR (24.8), PT(24.4), FI (5.0), SI (1.5)
On the basis of a business plan
40% in September 2007, 60% in March 2008
Against the lodging of a security of 120%

13. Transitional Aid to certain Member States
EUR 9 million to Austria for investments in collection centers for sugar beet
EUR 5 million to Sweden for the direct or indirect benefit of sugar growers in Gotland and Öland giving up sugar production

14. Implementing Rules Conditions for granting of the aid
Application for and granting of restructuring aid
Other aids from the restructuring fund
Payment of the aids
Reporting, controls and penalties

15. Regulations:
Council Regulation (EC) No 320/2006 establishing a temporary restructuring fund for the sugar industry in the Community and amending Regulation (EC) No 1290/2005 on the financing of the common agricultural policy
Commission Regulation (EC) No xxx/2006 laying down detailed rules for the implementation of Council Regulation (EC) No320/2006 establishing a temporary restructuring fund for the sugar industry in the Community