The German Association of Sugar Producers (WVZ) issued a statement announcing that it had lodged a complaint with the European Commission about subsidies related to sugar beet production – we read in the announcement published on the website of the National Association of Sugar Beet Growers (KZPBC).
- As of 2015, member states can authorize payments associated with sugar beet production.
- Since then, 11 out of 19 countries have taken advantage of this option and have paid their farmers more than 1.3 billion euros in payments linked to sugar beet production.
- According to German producers, the currently applied subsidy in the cultivation of sugar beets distorts competition. So they lodged a complaint with the European Commission (EC).
The current practice of double payments for sugar beet cultivation distorts competition. According to the regulation, bonuses should be awarded only in exceptional cases. However, this has long been the norm in many member states. This violates the European State Aid Act. That is why we submitted a complaint about state aid to the European Commission – comments of the head of the WVZ, Dr. Hans Jörg Gebhard, who is also Chairman of the Supervisory Board at Südzucker AG. These words can be read on the website of the German Sugar Association (WVZ).
– We call on EU Competition Commissioner Margrethe Vestager and her counterpart Janusz Wojciechowski to finally create fair competition at the EU level – read more in the published letter.
The liquidation of support for beet production from the door of German interests?
KZPBC pointed out the case. According to the unionists, no one needs to be reminded that the Germans have long been playing only for themselves. They supported the abolition of sugar rations and the minimum price for beets. The liberalization of the sugar market was supposed to lead to greater control of German sugar producers in Europe.
As we read in KZPBC’s answer – the drop in sugar prices and the profitability of beet cultivation has led to the closure of sugar factories and the elimination of beet production in areas deemed uncompetitive. It was destined to capture the sales market itself, and then the “goose spirit”. Not everything went according to plan, although the crisis in the market after the abolition of quotas would affect all sugar producers, we did not have a mass closure of sugar and liquidation of plantation areas.
Ironically, it was the most “blow” that they wanted to take over Europe – we read further. The signing of long-term contracts for the sale of sugar at scandalously low prices, which would have further disturbed market conditions, contributed to significant financial losses. Expansion failed and beet cultivation and sugar production were maintained in other member states, although severe disturbances persisted.
Offer beet payments in 11 countries
In the opinion of the KZPBC, this was undoubtedly helped by the determination of the farmers themselves and the courage of the member states. Beet payments have been introduced in 11 countries of the European Union. The applied payments associated with the production of sugar beets did not solve all the problems, but allowed a smoother transition from a system with sugar production quotas and a minimum price for sugar beet to a free market system. Poland has maintained a strong position in the European Union in terms of the volume of sugar production, and this production continues to occur in other member states.
EU countries that support beet cultivation (red), Source: zuckerverbaende.de
Germany wants to dominate the sugar market?
Today, the issue of payments related to the production of beets is again discovered. Why do German sugar producers, who in Poland buy more than 55% of beets from farmers and at least officially want to provide them with the best possible conditions, act at their expense? Will Poland become a country in which economic activity is focused only on the import and distribution of sugar from other countries? The behavior of German sugar producers is not surprising, but it seriously undermines confidence in the companies with which farmers have been cooperating for many years.
KZPBC believes that the allegations made by the German Sugar Producers Association regarding the lack of legal basis and violation of competition rules are at least bizarre. The support is paid on the basis of community regulations, and each member state, including Germany, has the right to support sectors and sectors of agriculture that are in difficult conditions and are important from an environmental, social and economic point of view.
Without support for beet production, it is difficult to talk about the profitability of this cultivation
It is worth noting here that the activities of the German Association of Sugar Producers are taking place in a period of greatest turmoil in our sector. Prices for the means of production have risen dramatically, it is becoming very difficult to balance expenditures with revenue, and the beet itself is losing competition with other crops. This measure also covers the period when EU member states will be able to provide further assistance in the context of the crisis resulting from the Russian invasion of Ukraine.
In the opinion of the Polish Association, the actions of German producers are aimed at Polish farmers and against the investments made in the sugar industry (including those made by German companies).
The list of countries that, according to Germany, engage in illegal practices, with the exception of Poland, includes Spain, Italy, Finland, Lithuania, the Czech Republic, Slovakia, Hungary, Romania, Croatia and Greece.
What can the European Commission do?
You can read about it on the portalspozywczy.pl website in the article below:
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