It simply meant that as soon as a market price fell below a certain threshold, intervention agencies bought surplus commodities.
(The raw cane sugar that the EEC imported to support certain countries was also bought at an above market prices).
In order to meet the goals of the CAP, the interventions prices for sugar were so high that even the least efficient producers could make an income.
Intervention prices in Finland, Ireland, Portugal, the UK, Spain, Greece and Italy were somewhat higher.
[11] The European Community put tariffs and quotas on (raw) sugar import from other countries.
[14] There were a number of trade agreements that allowed (groups of) third countries preferential access to the Community market.
The Community therefore succeeded to some of the United Kingdom's trade commitments with former colonies in Africa, the Caribbean and Pacific islands (The ACP countries).
Subsidized sugar exports rose from negligible levels in 1971–1972 to 2 Mt in 1973, including some C-sugar.
These alleged that the EEC export subsidies gave the community an abnormal share of the world sugar trade.
Petitions by Australia and Brazil then made that the GATT ruled that EEC subsidies depressed world market prices.
The European policy on exports and stocks was partly responsible for its failure to join the International Sugar Agreement in 1984.
It allowed 82,000 t of raw sugar from Brazil and Cuba to be imported under Most Favored Nation arrangements.
[8] In March 2001 the EU adopted the Everything But Arms (EBA) initiative, which aimed to give duty-free access to al goods exported by the least developed countries.
[9] The Doha Development Round of the WTO led to an agreement to abolish all forms of agricultural export support by 2013.
[19] In 2001 the EU Council agreed to continue the CMO sugar regime till June 2006, but also asked the European Commission for proposals to replace the system.
This was predicted to fail, because the least developed countries would ship their complete production to the EU under the EBA initiative.
It was expected that this would severely hurt the ACP countries and obliterate sugar production in the European Union.
This had to comply with international obligations, and bring the CMO for sugar in line with the 2003 CAP reforms.
After the restructuring period, the reference price would be used to determine when sugar had to be stored in a private storage system.
The idea was to incite the less competitive sugar factories to leave the industry, while providing compensation for their owners and the social impact of closures.
[21] The planned reduction was from 18,540,000 t[20] to about 12,500,000 t. The restructuring or buy out would be financed by a levy on all sugar produced during the time.
In November 2006 EU agriculture minister Mariann Fischer Boel announced that the renounced amount of quotas was far below expectations.
The minister therefore called upon the industry to take its responsibility, but also threatened with the linear cut of quotas which had been determined in case the restructuring would fail.
[26] In 2013 the European Parliament and Member States decided on a CAP reform, and agreed to end the sugar quotas in September 2017.
[25][4] After the end of the quota system, member states were allowed to provide voluntary coupled support linked to production.
[27] The commission can grant private storage aid, in case market volatility would cause high losses for producers that cannot store their product.
[27] As a final instrument, the commission can intervene on grounds of several disturbance clauses in the CMO regulation.