EU calls for sugar cuts

EU agriculture commissioner Mariann Fischer-Boel will call for cuts to the sugar price guaranteed to European beet farmers on Tuesday.

Europe’s much-criticised regime for supporting sugar farmers will be under the spotlight when farm ministers gather for talks in Brussels.

“Everybody can see that it is necessary to reform the sugar sector,” Fischer-Boel told the FT on Monday.

“It has not changed for 40 years, and it is the only sector where nothing has happened.”

“It is crucial that we reach a decision. The negotiations will be tough, but I urge ministers to be bold,” she added.

WTO leverage

The agriculture commissioner believes reform is needed to bolster the EU’s position at next month’s WTO meeting in Hong Kong - where Brussels will come under pressure to give ground on farm subsidies.

Brussels knows that its sugar regime is widely regarded as one of the most trade distorting in the world, and Fischer Boel hopes her proposals will help win over Europe’s skeptical trade partners.

The plans include cuts to the EU’s internal sugar price of 39 per cent. This move could end production in countries such as Ireland and Portugal and is sure to face stiff opposition.

“It is clear that there will be member states and there will be areas where sugar production will no longer be viable,” Fischer Boel acknowledged.

“I need 39 per cent. If we agree anything considerably below that, it would mean another reform in four or five years’ time,” she insisted.

European farmers are currently guaranteed a sugar price three times higher than on the world market. High tariffs ensure that more efficient producers are kept out of the EU market.

The large surpluses generated in Europe are then dumped on to the world market. 

ACP concern

The African, Caribbean and Pacific Group of States (ACP) have dismissed the plans - saying they could lose €300 million a year if the cuts are enacted.

The 18 African, Caribbean and Pacific states also benefit from the preferred price system.

“The fate of ACP sugar supplying states lies in the hands of EU Agriculture Ministers,” the general secretariat of the ACP said on Monday.

“Our future economic prosperity and social stability rests largely on decisions that will be taken in the Council of Ministers in the coming days,”

“We will continue to fight to ensure we get a fair deal. It is certainly not fair that the weakest stakeholders are hit the hardest,” Agriculture Minister of Mauritius and Chairman of the ACP Sugar Group, added.

But Fischer Boel has dismissed ACP criticism, maintaining that cuts are essential.
“It is obvious that we never promised the developing countries a certain price,” she countered.

“If we maintained a price three times as high as on the world market we would not do them a favour: the European market would simply collapse, and they would lose their market.”

Fears for developing world

But ACP countries are not alone in their opposition - the commission will also have to work hard to win support in the NGO world.

Oxfam has welcomed calls for reform of the sugar sector but insists the current deal is bad for the developing world and poor farmers in the EU.

“Commissioner Fischer Boel’s claim that it is the only alternative available is simply not true,” Oxfam said in a statement on Monday.

“Her proposal will only reward big companies and the big sugar exporting countries, leaving everybody else with crumbs.”

“Less than a month ahead of the WTO Ministerial in Hong Kong, the EU is set to offer a generous €5 billion in 2006 to help its farmers and industry adjust to the reform and a meagre €40 million to some of its key developing country trade partners.”

“This imbalance seriously calls into question the EU’s commitment to sustainable trade reforms and the Doha Development Round.”

Proposals for reform of the EU sugar regime were first published by the European Commission on June 22.

They were designed to bring it into line with other already reformed CAP sectors, as well as helping to meet the EU's existing WTO obligations.

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