The reform of the Common Organization of the sugar market in the EU and its impact on the sugar beet sector in Castilla y León

Abstract

The reform of the Common Organization of the Market (CMO) in sugar in the EU is responsible for a 50% loss in production quota for the Spanish sugar sector, with the closure of numerous factories and consequent loss of jobs. The aim of this article is two-fold: 1) to describe the process and basic features of the CMO reform in the EU and Spain, and 2) to present a method for the analysis of the impact of measures implemented in the Spanish sugar beet sector as a consequence of the CMO reform. The method is based on a positive mathematical programming model in which, in addition to sugar beet, other crops which compete with sugar beet for land, such as cereals and oilseeds are taken into account. As well as the agricultural policy measures applicable to sugar beet, the model takes into consideration all the measures of the Common Agricultural Policy (CAP) relative to crops competing with it. The measures derived from the Reform of the Common Organization of the sugar market vary from one autonomous region to another. In this study, the above-mentioned method has been applied to the case of Castilla y León, the autonomous region with the greatest production of sugar beet in Spain. The results, which show that the CMO reform entails a significant loss of profits for the sugar beet sector in Castilla y León, were obtained using data from the 2002 Red Contable Agraria Nacional to define the sugar beet sector, assuming that variations in cost and price are those published by the Ministerio de Medio Ambiente y Medio Rural y Marino between 2002 and 2009.