By Daisy Ayliffe - 24th November 2005
EU agriculture ministers reached a landmark deal on Thursday with agreement to cut Europe’s sugar subsidies by 36 per cent over four years.
EU officials say the deal will allow farmers who turn their backs on sugar production to recover 64.2 per cent of revenue due to the price cuts.
“The deal is done, with a 36 per cent price cut,” an EU official told reporters after a three-day negotiating marathon.
But EU farmers, sugar firms and third world producers that benefit from the subsidised prices believe the move will lead to job cuts.
Sugar producing nations outside the EU have also expressed unease at the changes.
Some 18 sugar producing ACP states with special access to EU markets will also be affected by the price cut.
Countries such as Mauritius, Barbados and Fiji have warned that their sugar cane growers will be less able to cope with the changes than European farmers.
EU Agriculture Commissioner Mariann Fischer Boel said the new sugar agreement "complies completely" with WTO rules.
She added that it will make her life a lot easier at next month's WTO ministerial conference in Hong Kong.
"I know I'll be in a much better position for the negotiations in December," she said.
The WTO had declared the current European sugar aid system illegal and gave Brussels until May 2006 to bring its policy into line.
NGOs agreed the system was unfair. They argued that paying Europe's sugar producers three times the world price encouraged millions of tonnes of sugar to flow onto world markets, lowering prices.
But today charities argue the latest deal still does nothing to help the world’s poorest.
“Developing countries have been sacrificed in order for Europe to reach a deal,” Oxfam said in a press release on Thursday.
“The commission has hurled money at its member states to convince them to sign up but has abandoned some of the world’s poorest countries to destitution.”
“At the very least, ministers must agree adequate long-term compensation to ameliorate the effects of this harsh reform at their heads of state meeting next month.”
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