Consequences of the Interventionism in the European Union Sugar Market

Abstract

The main aim of this article is to analyze the consequences of statutory regulation in the European Union sugar market with particular focus on the situation in Poland. The situation on the sugar market is largely determined by its statutory regulations. As a result of specific situation in the sugar industry, as highly dependent on agricultural sector, the sugar market has been adjusted to Common Agriculture Policy regulations. The aim of current sugar market reform is to decrease prices and production volumes. This should lead to improving the competitiveness of the European Union sugar industry in the world market. It requires termination of production in consecutive sugar refineries and taking up processes of restructuring. However, it remains questionable how far the statutory regulations prove to be an effective way of ensuring market equilibrium and prices stabilization. The lack of such effect entitles us to claim, that the statutory market regulation did not bring the envisaged results. The production limits set in advance, which are currently lowerfor Poland than its inland consumption volumes, halt the market mechanisms and in a consequence the production volumes do not reflect the demand, and the prices are subject to frequent fluctuations. Even though, there are also some positive consequences of the reform for the market, such as the major improvement of technological and economical parameters, which was enforced by the restructuring processes required by law.