A new vision for agriculture
momagri, movement for a world agricultural organization, is a think tank chaired by Christian Pèes.
It brings together, managers from the agricultural world and important people from external perspectives,
such as health, development, strategy and defense. Its objective is to promote regulation
of agricultural markets by creating new evaluation tools, such as economic models and indicators,
and by drawing up proposals for an agricultural and international food policy.
A look at the news

End of the sugar quotas: A sector under scrutiny?

June 2, 2014

The elimination of the sugar quotas after 2015 and the fate of agriculture in the transatlantic negotiations are raising serious concerns. In this context of market liberalization, sugar will meet the same fate as milk as early as October 1, 2017, and Brussels will thus eradicate output quotas and guaranteed prices that were initiated in 1968. This outlook is alarming, to say the least, for some operators in the European sugar market.

In Germany, Südzucker, the country’s key European sugar group, as well as British Sugar, its U.K. neighbor, are both raising a red flag and warning of the severe consequences on sales in a context of quota elimination without adequate advance work. In the overseas “départements” (the DOM), the end of quotas is also affecting sugar cane growers, who worry about matching European prices in global markets, and who fear increased competitiveness of the sector.

More importantly, sugar is experiencing strong price volatility, similarly to other agricultural commodities. How can the sector can be better tailored to face the elimination of quotas, and helped to preserve its competitiveness in a structurally unstable environment?

For the time being, the upcoming elimination of quotas or the procedures of the new CAP cannot provide farmers with guaranteed mechanisms to resolve the instability of agricultural markets, at a time when believing in the sole market self-regulating virtues would be a detrimental illusion.

A recent parliamentary report specifically addressed the case of the overseas “départements” and indicated that it will be difficult for the sugar cane sector to survive after the end of the European support system. As it was the case with the milk sector, the report especially advocates the creation of an observatory in charge of overseeing the global market.

If this recommendation is implemented for the whole European sugar sector, it will not be enough to safeguard a sustainable and competitive future to this economic segment without strengthening of safety nets, adopting market management measures to allow producers to adjust to the hyper-volatility of markets, or implementing of crisis reserves.

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Paris, 16 June 2019