Position Paper Dutch Sugar Sector
Transcript of Position Paper Dutch Sugar Sector
-
7/31/2019 Position Paper Dutch Sugar Sector
1/16
Long-term stability o the European
sugar sector, also ater 2015Position paper Dutch sugar sector, on behal o 10,000 sugar beet growers,
on a uture-proo European Common Agricultural Policy 2014-2020.
Growers and the industry
together strive or:
Food security
Rural development
Sustainable ood
production
Preservation o
biodiversity
Mitigation o (the
consequences o)
climate change
-
7/31/2019 Position Paper Dutch Sugar Sector
2/16
Executive summary
Objectives o the
Common Agricultural
Policy ater 2013
No need to reorm the
sugar CMO
Undesired eects o the
abolition o the EU sugar
CMO
Five issues
(that need improvement)
3
5
9
11
13
-
7/31/2019 Position Paper Dutch Sugar Sector
3/16
-
7/31/2019 Position Paper Dutch Sugar Sector
4/16
The environmental impact is very low. Domestic production,
close to the consumer, makes it possible to create closed
cycles and reduces the dependency on ossil uels. With the
production o renewable electricity and gas rom biogas,
Suiker Unie is also part o the new bio-based economy.
No need or new reormNow, in 2011, the starting point is totally dierent rom the
one in 2006. In 2006, there were several reasons to
implement changes. At present, the general opinion is that
although the sugar sector has suered, the restructuring has
been successul and the objectives have been achieved. The
sector is in balance. There is no need to reorm now. All the
more because the current sugar CMO has proven to be a
clear and eective instrument to meet the objectives set in
the CAP, such as ood security and stability. Considering that
the sector has undergone a successul restructuring, the
sector and the new system must be given the opportunity to
prove themselves. This requires a consistent policy. However,
i a new reorm is to be implemented, it must be based on a
clear and inormed decision. It must be tested or the desired
and undesired eects, both in relation to existing market
organisations in other countries and in relation to the
developments on the world market.
Five issues that need attention (and improvement)
Volume management continues to be necessary
Sugar is the only product in Europe with a unique balance
between domestic production and import. The European
Commission preers the sugar to be imported mainly rom
the LDCs. These countries only have access to the European
market i there is room or import and i the import rom
other countries is limited. Thereore, a volume management
system is necessary to preserve this balance. The quota
system has proven to be an ecient tool.
No increase o sugar import
Apart rom the already existing concessions based on the
Everything But Arms arrangement and WTO arrangements,
the European Commission must not make any new
concessions or sugar import through bilateral agreements.
This extra import would lead to urther cuts in EU sugar
production. Export opportunities outside the EU are too limited
Export opportunities strengthen the market orientation and
contribute to the worldwide ood supply, especially in times
o sugar shortages and high prices on the world market.
Level playing feld across the European Union
The sector operates in a highly competitive playing eld.
Thereore it is important that all sugar beet growers and
sugar producers in Europe are treated equally. However,
compared to other European countries, the Netherlands
have, or instance, relatively unavourable regulations or the
sale o by-products, such as earth oam/Betacal (lime
ertilizer).
Production charge o 12 Euros per tonne o sugar
This charge dates back rom the time that the sugar industry
received export reunds.
However, at present the sugar sector is budget neutral,
honours WTO commitments and does not receive any
reunds. Thereore, there is no longer a basis or this
production charge.
Weighted and responsible sugar CMO
The sugar sector strives or a weighted and responsible sugar
CMO in which the interests o the dierent parties involved
are equally served. The Dutch sugar sector wants to
contribute to that by actively participating in the dialogue.
This position paper is meant as input or the discussion
about the uture CAP ater 2013 and the sugar CMO ater
2014/2015 in particular.
-
7/31/2019 Position Paper Dutch Sugar Sector
5/16
Food security
There is an increasing demand or sugar worldwide. Each
year, sugar consumption increases with 2 to 3 percent as a
result o the growing world population and the increasing
prosperity in emerging economies.
The Food & Agricultural Organisation (FAO) expects that
sugar consumption will rise rom 168 million to 205 million
tonnes in 2019. The global sugar production must scale up to
be able to satisy the demand.
The current sugar CMO is characterized by a unique balance
between domestic production in Europe and import mainly
rom the least developed countries (LDCs). The consumption
o sugar in Europe amounts to approximately 16.5 million
tonnes, the domestic production to 13 million tonnes. To be
able to meet the demand, the EU imports 3.5 million tonnes
o sugar per year, in particular rom poor countries such as
Malawi and Mozambique. This balance between European
production and import is a way o ensuring ood security in
Europe. Moreover, ood security must be viewed rom a
global perspective. As it happens, a stable, domestic
production in Europe ensures ood security not only in
Europe, but also in the sugar-exporting LDCs.
Stability o the markets
Another important objective o the CAP is to avoid a highly
volatile market. Based on the current sugar CMO, the
European Commission (EC) has a number o instruments to
control the supply and demand on the European market. For
instance, in the event o a potential shortage or surplus, thequotas can temporarily be increased or decreased or
additional imports may be permitted. Further liberalisation o
the market can result in price fuctuations, which gives rise to
a volatile market, whereas the sugar CMO, together with its
set o instruments, provides stability.
The CAP, including the sugar CMO, not only contributes to a
stable market but also guarantees a air price or the armers.
This is o vital importance or the ongoing production o raw
materials. A competitive domestic sugar production in Europe
provides a xed volume or the European market and
thereore a basis or stability.
Rural development and stimulation o employmentThe cooperative Cosun (on behal o 10,000 sugar beet
growers in the Netherlands) is dedicated to the preservation
and development o the inrastructure necessary or
protable sugar beet growing (more than 70,000 hectares in
the Netherlands). As such, Cosun contributes to the
development o viable and dynamic agricultural
communities. Agriculture still represents a large part o
European employment. In the Netherlands alone, Suiker Unie
and the related suppliers provide thousands o jobs.
Moreover, the sugar industry is active in areas with ew other
industries; it even attracts other economic activities (Agro &
Food Cluster Nieuw Prinsenland).
Sustainable ood production
The sugar sector considers sustainable business practices o
paramount importance. It does pioneering work in
sustainable growing and production practices. The yields o
sugar beet growing are high in Europe. The environmental
impact is very low. The entire production chain is certied.
The actories work continuously on eciency improvements
to reduce energy consumption, water demand andemissions. The domestic production, close to the consumer,
makes it possible to create closed cycles and urthermore,
reduces the dependency on ossil uels.
Objectives o the CommonAgricultural Policy ater 2013
In November 2010, the European Commissioner or Agriculture Ciolos presented his proposal or the
Common Agricultural Policy (CAP) ater 2013. The sugar sector in general welcomes the objectives o
the CAP: long-term ood security, maintenance o viable rural communities with sucient employment,
stability o the markets, biodiversity and sustainable agricultural practices. What is more, it is also able
to actively contribute to them due to the current sugar CMO.
This position paper explains per objective o the European Commission how it is supported by the sugar
CMO and given shape by the sector.
5
-
7/31/2019 Position Paper Dutch Sugar Sector
6/16
On the land
Sugar beet is sown in
March and April.
Beet tails & wash water for green gas
Soil received with the beets is used to
raise the level of farmland, roads and dykes
Beet pulp for animal feed
Molasses for
fermentation
and animal feed
1 Lifting and loading
The harvest starts
in September.
2
Boiling
The thick juice is futher
concentrated into a
thick crystal mixture.
11Centrifuging
The centrifuges separate
the crystal mixture into
sugar crystals and syrup.
12
Storage
The sugar is stored
in sugar silos.
Production completed
The sugar leaves
the factory.
15
Drying and cooling
The sugar crystals
are dried
and cooled.
13
14
Washing of the sugar beet
The sugar beet is washed thoroughly
and any adhering soil is removed.
6
Slicing of the
sugar beet
The sugar beet is
sliced into thin strips.
7 Juice extraction
The sugar is extracted from the cells
of the sugar beet.
8
From beet feld to sugar actory:A model o environmental sustainability
-
7/31/2019 Position Paper Dutch Sugar Sector
7/16
Betacal lime fertilizer for agricultural purposes
Transport
Trucks transport
the sugar beet
to the factory.
3
Determination of the sugar content
The sugar beet is weighed and the sugar
content is determined.
5
Purification of juice
Minerals, salts and proteins are extracted from
the raw juice. It has now become thin juice with
a sugar content of approximately 15%.
9
Evaporation
By evaporating the water (with steam),
the thin juice thickens and the sugar
content increases to approximately 70%.
It has now become thick juice.
10
Consumers
The sugar will be sold in small quantities
at the supermarket.
7
Industrial clients
The sugar is transported to clients
in bulk trucks, among others.
6
The factory
The processing ofthe sugar beet starts.
4
Sustainability according to Suiker Unie
Sustainability is an important principle in the production
chain o Suiker Unie. In the entire chain, rom seed to beet to
sugar and several by-products, Suiker Unie strives or
recycling waste streams and keeping the energy
consumption as low as possible. The energy consumption or
the sugar production in the Netherlands has decreased withmore than 44% in the last 20 years. That is signicantly better
than the objective o the Kyoto Protocol and more than twice
the European objective o achieving a 20% reduction o ossil
energy consumption by 2020 compared to 1990.
Sugar beet is a wonderul crop and suitable or many
purposes. One hectare o sugar beet produces ve times
more energy than the energy needed to grow and process
sugar beet. The pulp, or instance, can be used as raw
material or biodegradable packaging material. Molasses,
another residue, can be used to make high-quality products
such as bakers yeast, yeast extracts or soup, ethanol,
perusion solutions and plant nutrition.
Suiker Unie already generates renewable electricity and gas
rom the biogas o its methane reactors. With the bio-
ermenter in Dinteloord, the building o which has started
recently, and the ermenter yet to be built in Vierverlaten,
Suiker Unie wants to produce a total o approximately
22 million m3 o green gas.
Photo:FrankTimmers,
BNDeSt
em
7
-
7/31/2019 Position Paper Dutch Sugar Sector
8/16
The new bio-ermenters are an
important step or Suiker Unie
towards urther increasing the sustainability o its production
chain. In the near uture, all waste streams/biomass o Suiker
Unie will be processed into green gas that will be injected
into the Dutch natural gas distribution network.
Annually, the ermenters will process 200,000 tonnes ovegetable residues into 18 million m3 o green gas. Together
with the green gas o the methane reactors, it is enough or
15,000 households. As a result, Suiker Unie will become one
o the largest producers o green gas in the Netherlands.
Suiker Unie also wants to use green gas or its vehicles.
Together with its partners, Suiker Unie explores the
possibilities o using the gas or the transport o its sugar.
There are already company cars, lease cars o employees and
trucks running on green gas. Suiker Unie will not only
process the residual product rom sugar beet, but also rom
other companies, or instance rom the glasshouse industry
o the Agro & Food Cluster Nieuw Prinsenland. This means
that Suiker Unie takes part in the new bio-based economy.
Protection o biodiversity
200 years o progress in crop breeding, including resistance
against diseases, have signicantly contributed towards
increased yields o sugar beet growing and have resulted in
many varieties. To preserve the biodiversity and urther
enhance the protection o the environment, crop rotation
with sucient crops, including sugar beet, is important.Sugar beet is grown on the same eld only once every three
to ve years. As a valuable crop in the rotation cycle, it
prevents the spread o diseases. As a result, less ertilizers
and pesticides will have to be used in the growing o other
crops. It is important, thereore, to keep sugar beet in the
crop rotation cycle.
Advantages or wildlie
Birds are a good indicator o biodiversity. The stubble rom
previous crop and the post-harvest stubble are important to
wild animals, especially birds. Sugar beet elds retain an
open vegetation structure with areas o bare soil until late
spring. From an ocial study in Great Britain, it appears that
this is conducive to many ground-nesting birds such as
stone-curlews, lapwings, skylarks and wintering pink-ooted
geese.
Bio-basedEconomy
Sugar beet is an
important rotational crop. It
is never grown in continuous
single-crop arming. As rotational crop,
sugar beet plays an important part in crop
rotation with cereals. The cereal yield ater sugar
beet can be 10 to 20% higher than ater two years
o successive cereals. Because sugar beet is
seldom a host to pests and diseases which aect
other crops, the cultivation o sugar beet reduces
the level o diseases and pests and helps to
control weeds. As a result, ewer
pesticides are needed.
-
7/31/2019 Position Paper Dutch Sugar Sector
9/16
It is remarkable that abolition is raised as an option again, all
the more seeing that the European sugar has already
undergone a drastic reorm. In 2006, the reorm o the
European sugar market was approved. The most important
objectives were: reduction o the European sugar price,
bringing it more in line with the price on the world market, a
smaller competitive sector, better access to the European
market or the least developed countries and compliance
with WTO rules.
The reorm had a signicant impact on the European sugar
sector and resulted in a considerable reduction. The EU sugar
production has been reduced rom 19 million to 13 million
tonnes. O the 310,000 European growers, 140,000 have let
the industry which led to a reduction o 750,000 hectares o
sugar beet area in Europe. O the 189 European sugar
actories, 83 have been closed. Bulgaria, Ireland, Latvia,
Portugal and Slovenia have completely ceased to producesugar and thereore also to grow sugar beet.
In the Netherlands, a restructuring has taken place as well.
Royal Cosun took over the sugar division o CSM.
Furthermore, three o the ve remaining sugar actories in
the Netherlands (Puttershoek, Breda and Groningen) have
been closed down in the past ew years.
Like the European Commission and the European Parliament,
the sugar sector is o the opinion that the 2006 reorm o the
sugar market has achieved its objectives. The export o sugar
has been restricted. Beore the reorm, it was possible to sell
quota sugar on the world market with export reund. At
present, the EU can only export a maximum o 1.3 million
tonnes o surplus sugar per year. There are no more
European export reunds. This means that the current system
respects WTO commitments.
The production o sugar is not nanced with EU unds.
Furthermore, a ew years ago the European Commission
introduced a special scheme or bio-based companies and
the sucrose chemical industry. Not only can they
purchase sugar rom the European market
(out-o-quota quota sugar), but also an
additional (zero levy) import quota o
400,000 tonnes has been opened
or them. With this measure, the
increasing demand or sugar
as raw material or bio-
based products such as
biodegradable plastics
is met.
No need to reorm the sugar CMO
2006 Consolidation process
Closureof83factories
Decreaseinsugarbeetareaof
750,000 hectares
Lossof30,000jobs
Endofsugarbeetcultivationfor
140,000 armers
Completeclosureofsugarindustry
in 5 European countries
Because o the CAP reorm, the sugar CMO, which is part o the CAP, is also part o the discussion.
The sugar CMO is valid up to the growth season o 2014-2015. The European Commission is exploring
several options or the sugar policy ater 2015. The options vary rom continuing the current sugar
policy to abolishing the sugar CMO and an alternative in between. Abolition o the sugar regime means
abolition o the sugar quotas.
2006
Sugar reorm
successul
according tothe European
Commission and
the European
Parliament
9
-
7/31/2019 Position Paper Dutch Sugar Sector
10/16
The sugar CMO also is CAP-proo and in line with the
Everything But Arms arrangement (EBA). Sugar rom the
least developed countries (LDCs) is allowed to enter into the
EU duty-ree. The European consumption o sugar amounts
to approximately 16.5 million tonnes, the production to
approximately 13 million tonnes. To be able to meet the
demand, the EU imports 3.5 million tonnes o sugar per year,especially rom poor EBA countries such as Laos, Malawi and
Mozambique. Europe has changed rom a net sugar exporter
into a net sugar importer. Furthermore, the European sugar
price is thus more refecting the world market price.
Starting point in 2011 is dierent than
in 2006
Sustainable,competitivesector
Uniquebalancebetweendomestic
production import rom LDCs
Fromnetsugarexportertonetsugar
importer
WTOcommitmentsarehonoured
CAP-proof
NomoreEuropeanrefundsbudgetneutral
The sugar reorm has resulted in a drastic restructuring o the
sugar sector. But in the Netherlands, among other countries,
it has also resulted in a sustainable and relatively strong
sector. The two remaining Suiker Unie actories in the
Netherlands produce approximately 900,000 tonnes o sugar
per year.
The starting point at present, in 2011, is thereore totallydierent rom the one in 2006. At the time, there were several
reasons to implement changes. The sugar regime had not
been changed in almost orty years since 1968. There was
denitely more pressure to reorm at the time.
The current general opinion is that although the sugar sector
has suered, the restructuring has been successul, the
objectives have been achieved and the sector is in balance.
Also the European Court o Auditors concludes that the
objectives o the 2006 reorm have been achieved in a largely
budget neutral way.
This means that there is no need to reorm again. All the
more because the sugar CMO has proven to be a clear and
eective instrument to meet the objectives set in the CAP.
Especially ater a successul restructuring, the sector and the
new system must be given the opportunity to prove
themselves urther. This requires a consistent policy. Any new
reorm must be based on a clearly substantiated decision,
tested or desired and undesired eects, both in relation to
existing market organisations
elsewhere in the world and in
relation to the most recent
developments on the world
market. Consistent
policy
required
-
7/31/2019 Position Paper Dutch Sugar Sector
11/16
Reduction o sugar beet area disappearance o sugar
industries
One o the options o the proposal o the European
Commission is the abolition o the sugar quotas. This will
result in signicant fuctuations o the sugar price and
consequently the price o sugar beet. These price fuctuations
lead to large annual dierences in sugar beet area.
In the end, this alternative may lead to a drastic reduction o
area.
The processing o sugar beet requires highly capital-intensive
production acilities. The actories are only suitable or the
production o sugar. In case o small(er) harvests, they cannot
switch to another product. I a sugar actory were to
disappear as a result o competition o other crops, price
erosion or otherwise, it is unlikely that it will return at a later
stage when market conditions have improved. This explains
why there are sugar market regimes all over the world,
thereore also in the Netherlands. More than 3,000 people
depend or their livelihood on the production o sugar, just
like approximately 10,000 sugar beet growers and their
amilies. A stable supply o sugar beet is necessary to
preserve the sugar industry.
Food security and stability
The sugar price on the world market is highly volatile. More
oten than not, this price is at a lower level than the price at
which the European growers can grow their sugar beet. This
volatility is caused, in part, by the limited elasticity o the
demand or sugar. I the supply increases, the consumption
o sugar hardly rises, i at all. Consequently, it results in a
considerable decline in prices. This is exactly the reason why
on almost all internal sugar markets in the world, the supplyis regulated in one way or another. As long as that is done,
the world market will unction as a market or surpluses. Only
a relatively small part o the sugar produced worldwide is
traded on the world market.
By only liberalising the European sugar market, the price
level in Europe will probably plummet. As a result, the
armers in Europe, who have to comply with all kinds o
additional sustainability requirements, will not be able to
compete anymore. Brazil, or instance, is able to produce
sugar at such low prices that even the most ecient
European sugar production areas cannot compete with it.
Europe would come to depend largely on import. From the
point o view o ood security, this is an undesirable situation.
Since the 2006 sugar reorm, the European Union has already
changed rom net sugar exporter into one o the largest net
sugar importers. It is irresponsible to increase the import
even urther. Food security is an important objective o the
sugar policy. By balancing supply and demand, stability is
created on the European market. Quotas have proven to be
an eective instrument to ensure ood security and stability
on the European market.
Sustainability
Abolition o the sugar CMO means an increasing pressure on
the environment.
In order to meet the worldwide increasing demand or sugar,
the global sugar production must scale up. I as a result o
liberalisation the demand rom the European Union
increases, this will lead to the conversion o areas previously
not used or cultivation into cultivated areas elsewhere in the
world. Scientists know that such conversion into cultivated
area results in even more CO2 emissions rom the soil.
In order to achieve the objectives o the CAP, the production
as close as possible to the consumer is the best option by ar.
The domestic production not only makes it possible to create
closed cycles, but also reduces the dependency on ossiluels. Moreover, sugar beet growing in Europe has little
impact on the environment.
Undesired eects o the abolitiono the EU sugar CMO
Abolition o the sugar CMO has several undesired eects. For instance, a large number o
developing countries whose sugar is allowed to enter into Europe duty-ree will lose these export
opportunities. Furthermore, it remains to be seen i the European sugar beet growers and the processing
sugar industry will manage to keep afoat. By abolishing the regime, the European sugar price will
fuctuate considerably. Food producers and consumers will also be aected by such fuctuations.
11
-
7/31/2019 Position Paper Dutch Sugar Sector
12/16
The uture o the least developed countries is at stake
Sugar is one o the largest national export products or many
least developed countries.
Their income rom sugar export is used to invest in the
industry so that they can develop economically. A well-
unctioning sugar industry also oers them the opportunity
to raise the standard o living o their population. In Malawi,or instance, the sugar sector provides employment to a large
part o the population. It gives poor, small armers who are
completely dependent on the sugar sector an income.
Since the 2006 reorm, sugar rom the LDCs is allowed to
enter into the EU duty-ree. As a result o this arrangement,
large investments have been made in the local sugar industry
in these countries. By only liberalising the European sugar
market, the price level in Europe will probably drop. Possibly
even below the level at which these LDCs can compete with
countries such as Brazil, which would also have ree access to
the European market. As a result, a large number o these
developing countries would probably be let with nothing.
Regulation is the best guarantee or a protable cultivation in
LDCs. Moreover, it is not air to rst make promises to these
countries and then abolish the avourable conditions they are
beneting rom.
-
7/31/2019 Position Paper Dutch Sugar Sector
13/16
The need or the adjustments must be substantiated based
on acts and generally accepted macro-economic principles.
Although the sector on the whole endorses the current sugar
CMO, it has identied ve issues that need attention (and
improvement).
Volume management continues to be necessary
Sugar is the only product in Europe or which a unique
balance between European production and import has been
ound. The European Commission preers the sugar to be
imported mainly rom the LDCs (Least Developed Countries).
These countries only have the opportunity to export to the
European market i there is room or import and i the import
rom other countries is limited. A volume management
system is necessary to preserve the balance between
European production and import. The quota system has
proven to be an ecient instrument to achieve this.
No increase o sugar importApart rom the already existing concessions based on the
Everything But Arms arrangement and WTO arrangements,
the European Commission must not make any additional
concessions or sugar import through bilateral agreements.
This extra import would lead to urther cuts in EU sugar
production.
Export opportunities outside the EU are too limited
Export opportunities strengthen the market orientation and
contribute to the worldwide ood supply, especially in times
o sugar shortages and high prices on the world market.
The export opportunities are too limited at the moment to be
able to deal with fuctuations in the production. The sector
wants to be able to take advantage o high prices on the
world market as well.
Level playing feld across the EU
The sector operates in a highly competitive playing eld.
Thereore it is important that all sugar beet growers and
sugar producers in Europe are treated equally. However,
compared to other European countries, the Netherlands
have, or instance, relatively unavourable regulations or the
sale o by-products, such as earth oam/Betacal (lime
ertilizer).
Production charge o 12 euro per tonne o sugar
This charge dates back rom the time when the sugar industry
received export reunds. As the sector is budget neutral,
respects WTO commitments and does not receive any
reunds anymore, there no longer is a basis or this
production charge. The money that is contributed by the
sector now disappears in the general EU unds.
Five issues (that need improvement)
In general, the sugar industry welcomes the objectives o the CAP ater 2013. The question is how
they should be given shape in practice and be translated into regulations and agreements. The
adjustments to the sugar regime must take the interests o the European sugar beet growers and sugar
producers and buyers, as well as those o the sugar exporting (developing) countries into consideration.
Quotas
LowerthanEU
consumption
Foodsecurity
Stability
Effective
Simple
Budgetneutral
13
-
7/31/2019 Position Paper Dutch Sugar Sector
14/16
-
7/31/2019 Position Paper Dutch Sugar Sector
15/16
The beet and
sugar sector
in the EU:a model o
sustainable
ood production
-
7/31/2019 Position Paper Dutch Sugar Sector
16/16
Catharina Aerts, Manager Public Aairs Suiker Unie, P.O. Box 100, 4750 AC Oud Gastel paper ojustied