Reform of the EU Sugar Regime: Impacts on Sugar Production in Ireland

The EU Common Market Organisation has remained largely unchanged since its inception nearly 40 years ago. Reform has become inevitable due to changes to other sectors in the Common Agriculture Policy and pressure arising from international commitments. The current system provides sufficient support for all Member States to produce sugar, regardless of their efficiency. The proposed reform will therefore affect the least efficient producing regions most strongly. This paper examines the case of Ireland in light of the competitive position of its sugar sector in the EU context. Calculation of the likely impact on sugar beet gross margins and farm income suggest that many producers will want to exit sugar beet production. In light of this, the implications and possible strategies for growers and Irish Sugar are discussed.