The current system of prices, production and import quotas for the EU sugar market, which has remained largely unchanged since its inception in 1968, is due to expire in June 2006. The Committee's report examines possible reform options, in order to make recommendations on the position the UK should adopt in EU negotiations. Findings include that the current system is highly complicated, involving a mixture of policy instruments which combine to inflate consumer prices in the EU to around three times world levels, as well as restricting competition, limiting market access and encouraging over-production, with surpluses having to be dumped abroad using export subsidies. The Committee recommends significant reforms are adopted including lowering the import tariff rate and significant reductions to the internal market price, phased in over time, as well as ending production quotas after a market balance has been achieved. Decoupled payments to EU sugar producers will help them adapt to the new market conditions, whilst transitional aid programmes can assist the economies of African, Caribbean and Pacific States, whose benefits from preferential import arrangements will be eroded.