Reform of the Common Market Organisation for sugar - impact on the EU sugar production and consequences for the seed industry

Against the background of a necessary cutback of the EU sugar production, mainly as a result of world trade political requirements, on June 22, 2005, the EU-Commission submitted a legislative proposal for a reform of the Common Market Organisation for Sugar. Central elements of this reform are the abolition of intervention activities, cuts of institutional prices and restructuring the EU sugar sector. This paper analyses the impacts of these measures on beet sugar production within the EU and discusses the impact on the seed industry. Analysis show that the reform is likely to reduce sugar production by some 8 million tonnes with approximately 900,000 ha taken out of sugarbeet production. It is anticipated that in the EU-15 countries the sugar industries in Austria, Belgium, Germany, France, UK, Netherlands, Sweden and southern Spain is likely to survive, while those in Denmark, Finland, Greece, Italy, Ireland and Portugal will have to abandon sugar production. For the seed industry this means a heavy reduction in seed sales. The seed companies will have to adjust all areas of their business.