The recent developments observed in the European Union Sugar Regime have significant reflections in the near past. Besides the sugar sector, it also drew the attention of the mass from other sectors.

As reflected to the national press this subject is not related with only sugar prices. Within the process of globalization the agricultural support of WTO to the developed countries and to the other countries which had provided protection for agriculture via high customs tax has been decreased. This pressure had affected also the EU countries negatively. While these developments take place in the global agriculture, also the changes experienced as a result of the organizational challenges encountered by the Union due to the enlargement process and the deficiencies faced during the implementation, brought the idea of reform at issue for the EU sugar sector. In addition to the implementations brought by WTO related to more liberalization, Lomé Convention signed with Africa/Caribbean/Pacific ACP (1) countries and EBA Conventions to enter into force by 2009 signed with Least Development Countries/LDC(2) has also influence on the decision of the EU.

Due to the provisions of these conventions 1.3 million tons imported by the EU from ACP countries and 2.2 million tons of sugar to be imported from LDC, the Unions wants to constrain the over demand domestic sugar production. In other words the EU does not stop to produce sugar in quantity of domestic consumption.

The financial load of circa 1.5 billion Euro deriving from the subvention of the exported over demand sugar produced by the Union that is approximately 3 million tons to decrease, in this way the income provided to be allocated directly to the rural development and to be provided as support directly to the producer is very important in indicating the economical aspect of the reforms.

After the reform that was signed by the Ministers of Agriculture of the EU and will be put into practice after providing the approval of the EC (Council), the decrease in the prices in the EU will not be implemented promptly in our country as perceived, but these decreases will take place gradually in 4 years time. Starting from the marketing year 2006/2007 the decrease rate in the sugar prices will be 20% in the first year, 27.5% in the second year, 35% in the third year and 36% in the fourth year. On the other hand the prices to be formed will not be the domestic market prices; these will be the reference prices in quality of indicators. The domestic sale prices in the EU countries will independently be determined as it is done today according to the market conditions of each country.

The sugar reform to be realized will also have reflections on the sugar sector of Turkey after some time and the sector will indirectly be influenced. Against the sugar beet and sugar prices regulation revolted to 36% discount foreseen by the said reform in the EU, the biggest sugar beet producer, in order to provide sector sustainability in the country it is essential to necessary measures related to the decrease of production and processing costs.

EU Sugar Reform has also brought by itself the measures to cover at maximum the loss of the actors of the sector. In this respect the loss of the producer will be compensated at an average rate of 64.2% of the price discount. For the EU sugar factories and isoglucose and inülin syrup producers, with the scope of annulling the negative social and environmental impacts of this reform to last for 4 years, a reorganization program based on volunteer system to promote the payments for factory closure or ceasing the production will also be implemented. Within the scope of this program the factories to cease sugar production will receive an incentive of 730 Euro per ton in the first two years, 625 Euro in the third year and 520 Euro in the last year.

The Turkish agriculture will take a new shape through the policies developed in this way; WTO Agricultural Convention and EU Membership process. The radical changes in the World sugar sector will bring mandatory innovations in the sector management at every level. While these developments take place in the EU, the sustainability of the sector in our country where every year approximately half of a million sugar beet producer cultivates sugar beet; can only be provided via the lowest cost and the highest productivity conditions.

In addition to the current capacity of the sector, without neglecting the production and export potential, in the preparatory work of the Sugar Law, the related legal regulatory work to be executed to create a self-financing sector, and WTO discussions to conclude with the least tariff discount to protect the sector from dense import pressure and in the EU agricultural negotiations the sugar to be involved in the sensitive product group are very important in providing the sustainability in the sector.

The harmonization of the quota applied to Starch Based Sugar in our country with the values of pre-accession to the EU, the productivity of the EU countries in sugar sector and the mechanisms and arguments that increase the productivity to be implemented in our country will increase the competitive power of post reform National Sugar Sector against the EU.

Agriculture is one of the most important chapters of the negotiations with the EU and this chapter to be held in national discussions prior to the negotiations has to be considered as an important development. Besides, regardless of the membership of Turkey to the EU it is essential for Turkey to under go a transitory period in agricultural and sectoral base. The adhesion to the EU will accelerate the said organizational transformations.

As a result after the EU sugar reform it is possible to provide sustainability in sugar beet and sugar production; which enables a stable industry at each stage of the service provided from the producer to the consumer, and that prevents the loss of the related parties of the sector, with the establishment of an organization functioning according to economy rules