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CIBE-CEFS-EFFAT JOINT LETTER
TRADE FOR ALL: THE EU-MERCOSUR NEGOTIATIONS
Brussels - 4 June 2018
Dear President Juncker,
Representing European sugar manufacturers, sugar beet growers, and employees respectively, CEFS, CIBE and EFFAT are watching with concern the ongoing EU-Mercosur trade negotiations.
We would like to recall the theme of the Commission’s current trade strategy, which is ‘trade for all’. We recognise the importance of opening overseas markets for EU products. But the EU’s trade policy must work for everyone: defensive as well as offensive sectors, agriculture as well as industry.
The EU beet sugar sector has been neglected by trade policy in recent years, and used as a bargaining chip in negotiations. Over the past five years bilateral access to the EU sugar market has increased almost threefold, and now totals over 700,000 tonnes. WTO (CXL) access has also increased, to almost 800,000 tonnes.
These agreements were concluded well after the 2006 decision to abolish sugar quotas, which has transformed the EU from a net importer to a net exporter. We are now faced with a situation where market access for third countries well exceeds market requirements. These requirements will incidentally fall substantially with Brexit.
EU sugar beet growers and processors are suffering despite having engaged in drastic restructuring to increase their competitiveness and sustainability. Our sector is currently enduring an unprecedented period of hardship. Sugar prices are well below the EU reference threshold – the benchmark for the health of the sector – and insufficient to cover the costs of even the most efficient EU producers. Recent and potentially-forthcoming decisions to ban plant protection products will damage the competitiveness of the sector vis-à-vis third countries and undermine good environmental practices.
This adverse context will have consequences for the rural communities that are sustained by sugar beet cultivation and processing. The sugar sector provides a sustainable income for 140,000 farmers across the EU, as well as high-quality, industrial, remunerative employment in regions where few alternatives exist.
We implore the European Commission, European Parliament, and Member States to listen to the EU sugar sector and to defensive interests in general and to resist unreasonable demands from the Mercosur countries. The EU-Mercosur agreement will shape the perception of the EU of a generation of EU farmers and primary food processors. If the EU’s trade policy fails to work for everyone, the European project, of which EU farmers have so far been supporters, will suffer.
Johann Marihart, President European Association of Sugar Manufacturers (CEFS)
Eric Lainé President International Confederation of European Beet Growers (CIBE)
Harald Wiedenhofer, Secretary General European Federation of Food, Agriculture and Tourism Trade Unions (EFFAT)
EU BIOFUEL CHAIN OUTREACH TO COUNCIL
ON INCLUSION OF 7% CONVENTIONAL BIOFUELS IN BLENDING OBLIGATIONS ON FOSSIL FUEL SUPPLIERS
CIBE CONGRESS RESOLUTIONS: XLV CIBE Congress - 16-18 May 2018
CIBE PRESS RELEASE:
EUROPEAN SUGAR BEET GROWERS DEEPLY CONCERNED BY GLOOMY OUTLOOK
Ghent - 17 May 2018 - European Beet Growers held their 45th Congress in Ghent from 16th to 18th May 2018. They examined the main economic and political issues currently facing beet growing in Europe and the situation of the world sugar economy, with a special focus on the current market crisis. High level speakers, including Belgium’s Federal Minister for Independents and Agriculture Denis Ducarme, representatives of the European Commission and Secretary General of Copa-Cogeca Pekka Pesonen, participated in this event which gathered around 250 delegates and guests.
“European Beet Growers are extremely worried, all their fears expressed at our previous congress in 2015 are materializing. The collapse in world market prices which reached a six-year low recently, undermined this first year without quotas when EU production has been liberalised. The EU average sugar market price dropped as well and is currently at its lowest level ever, well below the sugar reference threshold. This is of course impacting beet prices and beet income all over Europe. Beet growers will have to face their lowest income to date. This is also the consequence of a weakened position vis-à-vis beet processors. If you add to this the incomprehensible recent decision by the EU Commission to ban neonics in pelleted beet seed, without even a phasing-out, it is too much” emphasised newly elected CIBE President Eric Lainé.
One session of the Congress was dedicated to new developments in the protection of beet and in new beet varieties. Innovation and precision farming in beet growing, harvesting and delivering were addressed. “Beet growers have always been at the forefront of innovation and good practices. But you need to be profitable to further invest in these developments. The situation of beet growers and arable farmers in general is very difficult now and in fact our previous investments are jeopardized” stated Eric Lainé.
Discussions also focused on the perspective on world markets, on market transparency, on the contractual framework and value-sharing clauses between growers and processors as well as on consequences of increased campaign length and risk management tools. President Eric Lainé stressed: “On all these topics, the situation has fallen far short of expectations. We welcome the results of the Omnibus Regulation but the urgent need for EU legislators to strengthen the role of farmers along the supply chain and to make farmers more resilient should now be addressed; appropriate tools of which risk management tools, need to be put in place in our beet growing countries. With ever stricter standards and more opening up of the EU market, and increasingly less level playing field on the world market and ever lower ambition in the development of EU bioethanol, without protection of our revenue and risk management tools such a situation is not sustainable. We fear very negative and irreversible developments”.
European beet growers called on the EU Institutions and the Member States to support concrete measures to manage and mitigate this strongly adverse context, to improve the position of beet growers and to improve the resilience of the sector, including: a prohibition of unfair trading practices, enhanced market transparency, implementation of risk management tools and introduction of financial support for research and development to maintain the highest level of sustainability in beet growing.
The full CIBE Congress resolutions adopted by its Board of Directors and presented by the CIBE President in his closing speech of the Congress are available on www.cibe-europe.eu.
CIBE, COPA-COGECA, EOA, EPURE AND CEPM JOINT LETTER:
TRILOGUE NEGOTIATIONS ON THE RECAST OF THE EU DIRECTIVE ON THE PROMOTION OF RENEWABLE ENERGY SOURCES
JOINT PRESS RELEASE CIBE-CEFS:
THE EU SUGAR MARKET SITUATION: AN UNPRECEDENTED PRICE DECLINE
Brussels - 9 May 2018 - At 372 EUR/tonne in February 2018, the EU average white sugar price is currently at its lowest level since the establishment of the European Commission Price Reporting System in July 2006, and down by more than 25 per cent since August 2017. It is almost ten per cent below the white sugar reference threshold, the only objective benchmark that exists to monitor the health of the sector. And it is far below EU average production costs.
Current sugar prices are not sustainable for beet and sugar production. This is confirmed by press reports that even the most competitive producers are sustaining heavy losses (1).
Unfortunately, calls from the European Commission for the sector to regulate itself take no account of market realities.
- Sugar production is up by logic: relative high world market prices at the end of 2016 and the abolition of quotas led to higher production. Higher production also allows for a greater distribution of fixed costs, increasing operators’ competitiveness in a more liberal environment characterised by increased competition.
- Meanwhile, low world market prices are dragging down the EU market. Sugar exports, while greater than under the quota system, are restricted by current world market price levels, debasing a major outlet. Substantial zero- and reduced-tariff import quotas set up since 2013, along with complete market opening to the ACP/LDC, prevents the gap between EU prices and world prices from exceeding 100 EUR/tonne for any sustained period. But world market prices do not reflect economic realities: as a residual dump market, world sugar prices are depressed in large part by subsidised production and exports from Brazil, Thailand, Pakistan, and India, and by excess production pushed onto the world market by a host of smaller players that is often sold at below cost.
If the gap between current EU prices and those until September 2017 remains at the present level, the net transfer of wealth from the sugar sector (farmers and industry) to secondary processors and retailers will be at least 2 billion EUR by the end of 2018.
We urge the European Commission and Member States to take account of the escalating crisis in the sector, and to consider ways to minimise the ongoing and potentially irreversible damage to farmers, workers, and sugar manufacturers.
(1) Reuters. 3 April 2018. EU sugar companies struggle to survive as prices plunge post-quotas.
JOINT PRESS RELEASE CIBE-CEFS:
BLANKET BAN ON NEONICOTINOIDS: A SEVERE BLOW WITH HUGE CONSEQUENCES FOR EUROPEAN SUGAR BEET GROWERS AND PROCESSORS
Brussels - 27 April 2018 - The vote today at the SCoPAFF to ban neonicotinoids, including in pelleted beet seed, is a severe blow for sugar beet growers and for the sustainability of the EU beet sugar sector. It is not a science-based decision as far as sugar beet is concerned. It is highly regrettable that a majority of Member States have ignored the data gaps in the EFSA assessment and the recent evidence put forward. As a result, both the environment and the farming community will be negatively affected.
There is no justification for banning the use of neonicotinoid seed treatments in sugar beet growing because of environmental concerns. The current use of such seed treatments in sugar beet is safe and represents a very low risk to non-target organisms, including pollinators. Moreover, the EFSA risk assessment assumes that all crops succeeding sugar beet are attractive to bees, while in practice across Europe 90 per cent of crops succeeding sugar beet are cereals, which are not attractive to pollinators.
Deprived of the use of neonicotinoids in pelleted beet seed, which constitutes a significant improvement in sustainability and efficiency, EU beet growers will be forced to resort to far less sustainable practices to control pests, i.e. several post-emergence spray treatments that are more harmful to pollinators and to the biodiversity. There is currently no sustainable alternative for EU beet growers: the spray treatments that will replace neonicotinoids in pelleted beet seed are less environmentally sustainable, more cost-intensive and less efficient. Not all growers will be able to afford the additional costs and high risk of crop failure resulting from this ban, and many will be forced out of the sector.
The irony of the situation is that it will be those growers who pay the most attention to good environmental practices who will be most affected. The ban will therefore go against and jeopardise a decade of investments designed to improve the good practices and sustainability of the EU beet sugar sector. Furthermore, this decision goes against the logic of competitiveness that has oriented the CAP reforms. As the EU sugar market is largely and increasingly open to imports from third countries, the only winners from this vote will be third country sugar producers, which benefit from much weaker environmental and social standards.
In an unprecedented EU market situation, with sugar and beet prices at record low levels, this ban will have immediate and long lasting negative consequences. CIBE and CEFS urge Member States and the European Commission to remain accountable for this decision and to work with the EU beet sugar sector to at least put in place accompanying measures, such as research and development support, to help mitigate as much as possible these negative consequences and maintain the highest level of sustainability achieved by the sector so far.
PRESS RELEASE: CIBE URGES MEMBER STATES AND COMMISSION TO ACT RESPONSIBLY AND WITH COMMON SENSE
Brussels - 23 April 2018 - With its proposal to ban neonicotinoids, including in pelleted beet seed, DG-SANTE, followed by some Member States, deliberately ignore data gaps in the European Food Safety Authority’s (EFSA) impact assessments as well as recent evidence with regards to sugar beet. European Beet growers repeatedly presented their case based on sound analysis and facts.
Commissioner for Agriculture Phil Hogan said also publicly that he “would be in strong support for a derogation. The science and all of the studies that have been carried out actually favor a derogation for sugar beet,” Phil Hogan told POLITICO in an interview at the Forum for the Future of Agriculture in Brussels. “But,” he conceded, “it’s a difficult issue. It’s gone through a lot of hoops in terms of science and politics.” Indeed, for political reasons and fear of public opinion, a ban of neonicotinoids in pelleted beet seed could be adopted by the Scientific Committee for Plants, Animals, Food and Feed Committee on 27th April.
Such a ban would be a severe blow for beet growers. Contrary to DG SANTE’s claim, they would be forced to go back over 20 years and to resort to far less sustainable practices to control pests: i.e. massive and cost-intensive spray treatments more harmful to pollinators, including bees. But not all growers will be able to afford additional costs and high risk of crop failure. It would therefore be extremely damaging for the sustainability of the beet sugar industry. Most investments made during the past decade would be undermined at a time of extreme difficulties for the sector.
The irony of the situation is that it would be precisely among the most competitive countries, where growers pay great attention to implement the best good practices in particular for pollinators that would be most affected. The irony of the situation is also that sugar produced in third countries with massive applications of pesticides and genetic modification would land on European consumers’ table. Who would be accountable for this mess? Who would be ready to support financially European growers and family farms affected?
CIBE strongly call for responsibility and common sense to prevail and urge Member States and DG-SANTE to:
- ask EFSA for further impact assessments with regards to sugar beet so as to respond to data gaps, notably as regards the succeeding crops scenario;
- amend, on the basis of the risk-benefit analysis of the use of neonicotinoids in pelleted beet seed by French Agency for Food, Environmental and Occupational Health & Safety (ANSES) and of the case for neonicotinoid in pelleted sugar beet seed put forward by CIBE, the proposals for the Commission Implementing Regulations as regards clothianidin, imidacloprid and thiamethoxam and propose a derogation for sugar beet pelleted beet seed until sustainable alternatives become available for beet growers.
The EU-Mercosur negotiations: in defence of the 98 EUR/tonne duty
Dear Commissioner Malmström,
CEFS, CIBE and EFFAT understand that in the context of the ongoing trade negotiations the European Commission has offered the Mercosur countries an annual tariff-rate quota of 100,000 tonnes of sugar at 98 EUR/tonne duty. This is a substantial quantity that is higher than the annual output of some factories.
The Commission has so far rightly resisted pressure to reduce the in-quota duty to below 98 EUR/tonne. The 98 EUR/tonne duty, as currently applied to the Brazilian WTO (or ‘CXL’) tariff rate quota, is essential to prevent damage to the sector in the ongoing discussions, for the following reasons:
- The 98 EUR/tonne duty levels the playing field somewhat between the EU and Brazil. The Brazilian sugar-ethanol industry benefits from a range of government support measures that allow them to sell at below cost prices. From 2020 the sector will receive a further financial incentive to increase production, with the entry into operation of RenovaBio – its credit-based biofuels promotion programme, which the Brazilian government expects to incentivise the construction of 20 new sugar-ethanol mills. Further, the Brazilian sector is subject to less stringent social and environmental standards – and therefore lower costs – than EU producers and growers.
- The 98 EUR/tonne offers some buffer against the erratic movement of the Brazilian Real (BRL) against the Euro. The former bottomed at 4.7 BRL/EUR in September 2015, having dropped from a high of 2.6 BRL/EUR in March 2013. It currently stands at around 4 BRL/EUR, and is still falling in value. The continued weakness of the Real against the Euro supports the competitiveness of Brazil’s exports, allowing them to undercut European sugar producers.
- Further duty-free market opening would depress EU sugar prices below even their current depressed levels. At this time, the EU average white sugar price is at its lowest level since the establishment of the European Commission Price Reporting System almost twelve years ago. It is below the EU industry’s average production costs, and therefore not sustainable. But the Commission expects these conditions to persist until at least 2030. The reluctance of the Commission to divide the EU’s bilateral tariff-rate quotas between the UK and the EU-27 raises the risk of more duty-free sugar available on the EU market.
We urge the European Commission and Member States to stand firm in support of the 98 EUR/tonne duty.
Johann Marihart, President, European Association of Sugar Manufacturer (CEFS)
Bernard Conzen, President, International Confederation of European Beet Growers (CIBE)
Harald Wiedenhofer, Secretary General European Federation of Food, Agriculture and Tourism Trade Unions (EFFAT)
Dear Ms Malmström / Dear Mr Hogan,
We understand that the EU-Mercosur negotiations are at a crucial point. On behalf of European sugar manufacturers (CEFS), European sugar beet growers (CIBE), and sugar sector employees (EFFAT) we call on the EU to resist pressure from Brazil to offer further market access concessions on sugar.
The EU sugar sector is currently undergoing a major reform that is having a dramatic impact on the European sugar market. The end of sugar quotas, combined with a depressed world market, have generated prices that are at their lowest level since the establishment of the European Commission Price Reporting System almost twelve years ago. According to the Commission’s most recent medium-term outlook these market conditions could last until 2030; they have already resulted in the closure of one beet sugar factory in Romania in January of this year.
The EU sugar market cannot sustain further opening without further damage to prices and to the sector. Brazil already enjoys the single largest access quota of any third country to the EU market, and is the dominant global exporter. Its developed system of government support means that its producers are able to sell their sugar at below cost prices, and the sugar cane sector will receive a massive financial incentive from 2020 with the entry into operation of RenovaBio – its credit-based biofuels promotion programme. Brazilian sugar producers benefit from lower social and environmental standards that are the subject of public criticism, while despite a common drive towards greater sustainability, EU beet growers and producers struggle to conform to ever-more stringent rules and meet ever-growing societal expectations. In this context, which is marked by further uncertainty owing to Brexit, it is no exaggeration to say that market opening to Brazil would be nothing less than catastrophic for the economic sustainability of our sector.
This matters. Our sector plays a unique role in the fabric of the EU rural economy. It offers high-quality industrial employment in regions were few alternatives exist. It produces not only sugar, but a range of products, such as animal feed and ethanol, that support the competitiveness of livestock producers and fermentation industries, among others. And sugar beet plays an important agronomic role in crop rotation for farmers. Crucially, the capital- and knowledge-intensive nature of sugar production means that once closed down, it is highly unlikely that a factory will re-open its doors. In other words, once sugar leaves a region, it is gone forever.
For these reasons we ask for extreme consideration in the ongoing negotiations.
Bernhard Conzen, President of the International Confederation of European Beet Growers (CIBE)
Joahnn Marihart, President of the European Association of Sugar Manufacturers (CEFS)
Harald Wiedenhofer, Secretary General, European Federation of Food, Agriculture and Tourism Trade Unions (EFFAT)