Changes to long-discussed sugar law nearing completion
Almost a year behind schedule and as early as next month, the Parliament's agriculture committee could complete work on an updated version of the law that regulates the production and sale of sugar in Poland.
Over much of the last year, parliamentarians have been wrangling over changes to the present sugar law. The changes are aimed at improving the way the market is regulated in Poland, Europe's third largest sugar producer, and bringing Polish legislature in line with similar laws on the books in the European Union (EU).
Since last summer, progress on the bill has been blocked by a prolonged disagreement over how to move forward with the privatization of the sugar sector. The government's plan has been mired in controversy as to whether Poland's sugar sector would best be served by the direct sales of mills to foreign investors, or by the creation of one large, Polish-owned sugar cooperative called Polski Cukier, as many parliamentarians proposed.
But in March, the Council of Ministers and Finance Minister Leszek Balcerowicz backed the Treasury Ministry's plan of direct sales, seriously deflating the Polski Cukier proposal. That support not only gave the ministry the green light to move forward with its privatization program, it also jump-started stalled efforts in the Sejm to hammer out a new version of the sugar law.
"Lately, we have made progress as far as the law is concerned," said Jan Wyrowinski, a Freedom Union (UW) parliamentarian from Torun, who is also deputy chair of the Sejm's agriculture committee. "It seems to me that another month, month and a half, and we could reach the end."
In the final meeting of the agriculture committee before the May Day holiday break, two key issues blocking progress on the bill were finally solved, Wyrowinski said. First, deputies accepted a proposal calling for the creation of a commission made up of both beet growers and sugar producers that will monitor developments in the sugar sector. The commission would be modeled after a similar agency that oversees the sugar sector in Europe, Wyrowinski said.
"This commission will represent the sector on a government level and set the game rules for the market starting from (beet) growers and ending with the producer and the consumer," Wyrowinski said.
Market analysts reacted positively to the news about this decision, saying that it is a major move toward bringing market regulation in line with the system used in the EU.
"If this is (created) that would be enormous progress," said Zygmunt Smolenski, a researcher at the Institute of Agriculture and Food Economics (IERIGZ) in Warsaw. "That commission in the EU takes care of everything."
The second obstacle that must be overcome in the work on the new version of the bill is the issue of who would be given control over the sugar production limits set by the government. At present, to keep sugar prices stable, the government regulates how much each mill, or grouping of mills, can produce. The production quotas are directly controlled by the mills .
In an effort to keep control of production in the hands of local farmers and out of the hands of international companies investing in the sector, some Solidarity Election Action (AWS) deputies have been pushing for production limits to be assigned to sugar beet growers instead of sugar mills. However, when it came down to the final vote two weeks ago, the agriculture committee accepted an article counter to the AWS deputies' proposal, whereby quotas on sugar production would be granted to sugar producers and not directly to beet growers.
But provisions would be included in the new law protecting planters' interests by guaranteeing their right to grow sugar beets, Wyrowinski said.
In addition to progress on the sugar bill itself, the government's privatization plan is also moving forward at a faster clip, Wyrowinski said. The government's privatization concept is to sell off one holding company, Slaska Spolka Cukrowa in the Opole voivodship, in its entirety to an investor or a consortium of investors. The remaining three sugar holdings would be broken up and sold off in small groups of mills.
Negotiations over the purchase of Slaska by French giant Saint Louis Sucre could be completed as early as this week. In addition, progress is being made on the sale of parts of the Mazowiecko-Kujawska and the Poznansko-Pomorska sugar holdings, Wyrowinski said.
"This is the next optimistic piece of news," Wyrowinski said.
