By Michael Haddon
LONDON--The U.K.'s sugar beet industry is continuing to improve
its efficiency and should be as competitive as cane producers
across the globe in coming years, domestic lawmakers were told
Wednesday, but uncertainty over the future of the European Union's
farming subsidies scheme is hampering further investment.
A representative of the National Farmers' Union told the House
of Lords committee--part of the U.K. parliament's upper legislative
house--that the bloc's current sugar regime should be extended
beyond its expiry in 2015 to provide producers and refiners with
the policy stability and time to encourage investment in increasing
efficiency and to achieve international competitiveness by
2020.
Sugar quotas have long been a staple of EU agriculture policy,
with the structure of such regulations hotly debated when the bloc
writes its budget every seven years.
"The EU has an opportunity to allow both our industries
[producers and refiners] to ready themselves for competition on the
global market by allowing us some protection and stability until
then," said William Martin, chairman of the NFU's Sugar Board. "We
believe there is considerable further increase we can achieve in
yield and efficiency."
Chris Carter, corporate affairs director at British Sugar, a
unit of Associated British Foods PLC (ABF.LN), said it would be
harmful to U.K. interests to abolish the Common Market Organization
and negotiations should "proceed with caution."
The CMO of the sugar market encompasses fixed prices,
interprofessional agreements, production quotas and market
management in an attempt to improve the competitiveness of the
sector, ensuring its long-term sustainability. New proposals for
the measures are currently being debated in Brussels, with a final
decision expected early in 2014.
"If policy arrangements are promptly scrapped this will
discourage the further investment needed to make our industry fully
competitive by 2020," Mr. Carter said. "We need to know what these
arrangements are...before we can make definitive future plans. If
we feel we cannot look far ahead enough or the policy environment
is uncertain it is going to cause delays in investment--of that
there is no doubt," he added.
The lawmakers' inquiry focuses on sugar reform in the bloc
through the lense of the Common Agricultural Policy reform package
and will feed into discussions in Brussels about the $75
billion-a-year aid measures.
NFU Sugar is the single entity that represents all sugar beet
growers in the U.K. and negotiates on their collective behalf with
the single processor British Sugar.
Write to Michael Haddon at michael.haddon@dowjones.com