The future of Sugar Beets post sugar liberation in EU

The European Union, as a group, produces approximately 20 percent of world sugar. In 2006, EU implemented sugar reform policy. The major aim was to reduce the price of sugar, providing guaranteed compensation to the farmers and fixing on a production as well as import quota. Sugar in Europe is mostly derived from sugar beet. European Union produces about 50% of the world beet sugar production. Sugar beet as a crop is of high importance. It is a rotational crop which prevents spread of diseases. This in turn reduces the usage of pesticides and fertilizers. Sugar beet is also used as bio-fermenter, which is used to produce green gas. In EU, where companies are continuously putting efforts to reduce the usage of conventional energy, sugar beet is set to gain higher importance. EU Sugar Reform: EU introduced sugar reform to promote beet sugar. The goals of this reform are as follows: � Ensuring regular sugar supply by minimizing price fluctuations in EU market � Providing base price for sugar and minimum guaranteed price to farmers � Enhancing competitiveness of sugar sector to withstand international competition � Restructuring the sugar sector and moving towards market reorientation � Ensuring financial stability of farmers � LDC and ADC producers granted preferential access to high value EU market � Limiting budget costs and increasing transparency of regime The reform led to a 36% reduction on reference sugar price. During the 200608 years, approximately 83 factories were closed, resulting in a reduction of about 60% capacity. On the other hand, the average factory size continued to increase. The situation led EU to become a net sugar importer during this time. Author: Souvik Hazra