Dáil Éireann debate -
Wednesday, 20 Nov 1991

Vol. 413 No. 2

Written Answers. - EC Court of Auditors Findings.

John Bruton

Question:

78 Mr. J. Bruton asked the Minister for Agriculture and Food his views on the recent findings of the EC Court of Auditors that the EC sugar regime (1) has failed to create a common market (2) generates overproduction and (3) inhibits a rational organisation of output according to comparative advantage.

Minister for Agriculture and Food (Dr. Woods)

The Court of Auditors report is a valuable commentary on the EC sugar regime.

I do not however agree that the sugar regime has failed to establish a common market. The common organisation of the market in sugar is in line with the principles enshrined in the treaty. Indeed the Commission and the Council ensure that each individual measure is in conformity with these principles. Community competition rules apply to the sugar regime and the Commission can take measures to deal with infringements.

Regarding the court's comments about Article 39 of the treaty it must be pointed out that stabilisation measures have always existed in the sugar sector through production quotas and self-financing arrangements. The latter ensures that, over a given year, Community producers meet the full cost of the disposal of quota production surpluses. There is also a system of compensation for storage costs which is self-financing. While the Community supply rate is 50 per cent above requirements, imports from third countries account for about half of that figure.

Production quotas are set for each member state, and these quotas are administered by the member states in accordance with Community rules. When fixing these quotas, the Community took into account the level of production in each member state. This policy reflects the Community's determination to maintain a certain level of production by beet growers and sugar manufacturers in all regions of the Community. This helps to make a direct contribution towards the development of rural society in these regions. A reduction in either production quotas or in the production of "C" sugar would not result in savings on the cost of the regime because any surplus quota sugar which is exported is paid for by producers under the self-financing system and "C" sugar does not attract any export refunds.

In general I am satisfied with the operation of the EC sugar regime and I would not like to see any major changes when the next review takes place before the 1993-94 marketing year.