EU court of auditors:Sugar reform.

RDM_83 again

Surprised there hasn't been a thread about this already. The EU court of auditors has found that the 2006 sugar regime reform was carried out using out of date figures.
This led to closure of plants that were of an acceptable level of efficiency e.g. the Mallow plant.
http://www.irishtimes.com/newspaper/breaking/2010/1111/breaking37.html

Haven't been able to find figures for EU numbers of people affected by the reform but I think I heard on the radio the figure of 150,000 being mentioned (I know sources sources sources)

My main issue however is with this piece of information.

More disconcertingly, the Court raises a red herring by pointing out that production quotas currently limit EU production to a level approximately 85% of EU consumption “for what is a strategic product for the agri-food and chemical industries, thus increasing the EU dependence on imports, while world market supplies are dominated by a limited number of exporting countries”. It recommends that future decisions which impact on EU sugar production “take into account the level of internal sugar production which is considered necessary given the Treaty objective of assuring availability of supply”

taken from the following website
http://capreform.eu/court-of-auditors-criticises-sugar-reform/

My question is what is the Commissions long term stategic thinking on this matter, sugar is a major food resource and in years of chronic oversupply it can be simply converted into ethanol (I am not suggesting that this would be in anyway an efficient way of producing biofuel, but it would use any unintended surplice*)
Surely the EU should be aiming for maximum self-sufficiency in terms of food resources not attempting to restrict it.

It is also important to note that as far as I am aware the reforms and improved efficiency did not result in any reductions in costs to consumers.

*rather than being used to flood developing countries markets

Scofflaw

As far as I can see the Commission was aiming for efficiency in the sugar industry as opposed to propping up inefficient producers at the expense of inefficient ones:

The Commission responds that an explicit targeting approach would neither have been feasible nor politically acceptable. The reform was based on a voluntary restructuring approach where the decision to abandon or remain in production was made by each individual sugar company in the light of the substantially lower institutional prices for sugar beet. It defends its approach by pointing that out that Member States with high profitability in beet production now account for 78% of EU quota (compared to 68% before the reform) where Member States with low profitability now hold 5% of the EU quota (compared to 12% before the reform).

That the approach taken was one of 'voluntary restructuring...where the decision to abandon or remain in production was made by each individual sugar company in the light of the substantially lower institutional prices for sugar beet' suggests that the figures used were irrelevant, since the Commission didn't target individual factories or areas anyway - it simply lowered the intervention price.

The other remarks by the Commission suggest that individual quotas are likely to go the way of the dairy quotas in the nearish future.

My question is what is the Commissions long term stategic thinking on this matter, sugar is a major food resource and in years of chronic oversupply it can be simply converted into ethanol (I am not suggesting that this would be in anyway an efficient way of producing biofuel, but it would use any unintended surplice*)
Surely the EU should be aiming for maximum self-sufficiency in terms of food resources not attempting to restrict it.

I suppose the question there is whether the EU should be aiming for total self-sufficiency in everything. If there's highly unlikely to be any difficulty importing sugar, and that's more efficient than growing it here, it doesn't seem particularly useful to concentrate on sugar self-sufficiency when that effort could be better used elsewhere.

cordially,
Scofflaw

RDM_83 again

Good point about fact that the cuts in prices were a general action rather than targeted. What caused the efficient Mallow plant to close (and I presume Greencore were aware of their own efficiency) . Now quiet confused why it would have especially with Coughlan (and the court of auditors) blaming the Commision for the closure, perhaps the compensation packages were too generous, if they were too generous it raises another issue in that this would be using EU money to encourage effecient businesses to close.

in terms of the 85% quota, could the remaining 15% not be bought at the global market rate, the sugar companies themselves would be able to decide if it would be effecient for them to produce an additional 15% at this price and food security would most likely be increased.

2nd with improved efficiency there should be reduced costs to consumer, I am not aware of any reduction?

Scofflaw

RDM_83 again wrote: »

Good point about fact that the cuts in prices were a general action rather than targeted. What caused the efficient Mallow plant to close (and I presume Greencore were aware of their own efficiency) . Now quiet confused why it would have especially with Coughlan (and the court of auditors) blaming the Commision for the closure, perhaps the compensation packages were too generous, if they were too generous it raises another issue in that this would be using EU money to encourage effecient businesses to close.

I hate to say it, but the general feeling seems to be that the government felt it would realise more money by using the site for property development...

RDM_83 again wrote: »

in terms of the 85% quota, could the remaining 15% not be bought at the global market rate, the sugar companies themselves would be able to decide if it would be effecient for them to produce an additional 15% at this price and food security would most likely be increased.

2nd with improved efficiency there should be reduced costs to consumer, I am not aware of any reduction?

As a general rule, reduced prices to producers only translates into reduced prices to consumer if the middlemen decide to pass along the savings. Currently, though, world prices for sugar are high:



cordially,
Scofflaw

jmayo

Scofflaw wrote: »

I hate to say it, but the general feeling seems to be that the government felt it would realise more money by using the site for property development...

Congratulations.
You win the prize.
Both Mallow and Carlow were earmarked as retail/shopping/residential units.
Greencore were in a win win.
They get compensation for closing their plants, they get massive money for developing fairly prime sites close to two towns.
And because it was construction government were happy.
Who needed industry when we had construction ? :rolleyes:

Everyone is winnner, except the farmers who lose a long term cash crop, the local ancillary industries, the local economy that loses sustainable jobs, and the factory employees.

Lots of us have been saying coughlan is an idiot and long before she arrived in Enterprise.
Here is prime example of her efforts.
Now do you know why IFA pushed government before Lisbon I to admit that they would veto WTO talks as per mendolson ?

Scofflaw wrote: »

As a general rule, reduced prices to producers only translates into reduced prices to consumer if the middlemen decide to pass along the savings. Currently, though, world prices for sugar are high:

That is the issue farmers have with almost all their products as can be by the difference betweem what consumers pay and what they receive.