Trade:Farmers Protest Over Sugar Reforms

Inter Press Service (Johannesburg)
NEWS
July 18, 2005 [/b]
Posted to the web July 19, 2005

By Stefania Bianchi
Brussels

More than 5,000 sugar farmers demonstrated in Brussels Monday as EU agriculture ministers gathered to debate the European Commission's proposed overhaul of the bloc's controversial sugar regime.

European sugar beet farmers and sugar cane farmers from the African, Caribbean and Pacific (ACP) group of countries gathered outside the European Union (EU) headquarters as agriculture ministers from the bloc's 25 member states discussed European Commission plans to end export subsidies and over-production of sugar.

"Save our sugar", read one placard shown by the demonstrators as EU ministers met to discuss the proposals, although no immediate decision was expected.

The European Commission, the executive arm of the EU, is planning to cut the guaranteed price of sugar by 39 percent over two years from 2007 and offer 60 percent compensation for producers forced out of business by the price cut.

This would mean European sugar beet farmers, to whom the EU currently pays 42 euros (50 dollars) per tonne of sugar beet, will get 25 euros (30 dollars) per tonne by 2009.

Under current rules, the EU offers a guaranteed price for sugar that is paid for in effect by consumers, with Brussels buying from producers at about three times the average world market price..

The reforms became necessary after the World Trade Organisation declared the EU policies, which date back to 1968, illegal based on a complaint from Australia, Brazil and Thailand.

Eight EU member states -- Estonia, Finland, Greece, Italy, Ireland, Lithuania, Portugal and Spain -- are facing the prospect giving up sugar production. These countries are pushing for Commission plans are set to be watered down.

Only Denmark and Sweden are fully behind the reform moves to cut the EU's 1.7 billion euros (2 billion dollars) subsidies for sugar beet farmers.

According to the International Confederation of European Beet Growers (CIBE), the overhaul of the EU's 40-year-old sugar regime would put 90,000 jobs at risk, with repercussions for another 410,000 indirectly related positions in farming and industry across the bloc.

The proposed reforms will also hit the sugar sector in 18 ACP countries hard. These countries benefit from the EU's current preferred price system and are urging the EU to impose less drastic price cuts spread over eight years.

ACP countries have a long tradition of supplying sugar to the EU market under the terms of the ACP-EU sugar protocol -- a trade agreement that has been hailed the world over as a model for development cooperation and has brought significant benefits to ACP economies.

As part of its development policy, which has been criticised for unfairly discriminating against sugar producers from other developing countries, the EU currently pays above market rates for sugar from a number of ACP countries, many of them former colonies of European countries.

The preferential access of ACP countries to the EU market currently represents some 70 percent of the revenue of their sugar sectors.

The loss of those privileges when the EU starts paying prices closer to market rates is expected to have a huge economic impact on many ACP countries that are dependent on sugar exports to the EU. Most ACP sugar is produced in Mauritius, Swaziland, Fiji, Guyana and Jamaica.

ACP farmers joined their European counterparts Monday to express their shock and distress at the proposals which they say will cripple sugar production in ACP countries.

Officials from the affected countries say the proposed reforms are disastrous and would put vulnerable economies and hundreds of thousands of jobs at risk. ACP ministers said the reforms would mean losses to their countries of an estimated 400 million euros (482.6 million dollars) a year, when the daily earnings per capita in some ACP countries are less than two euros (2.4 dollars) a day.

While the European Commission is offering 40 million euros (48.2 million dollars) to help ACP producers, the reform plans will mean far more in losses.

ACP representatives say that while "generous compensation packages" are being proposed for EU sugar beet farmers and processors, the ACP has so far only been promised a "paltry" amount to cushion the effects of the reform.

"Reform is supposed to improve the lives of people, but what the Commission has proposed would quite simply destroy us. Thousands and thousands of jobs would be lost with little or no alternative employment and the ensuing social consequences hardly bear contemplating," Christian Foo Kune of the Mauritius Cane Growers Association and president of the Mauritius chamber of agriculture said Monday.

"We just want to be treated fairly," added Foo Kune, whose own country stands to lose over 100 million euros (120.5 million dollars) a year under the terms of the proposals. "Unless adequate funds are made available immediately to help us adapt and survive, our future is terrifyingly bleak. Poverty, social instability, and the destruction of our way of life is all that awaits us."

The international relief agency Oxfam is also calling for a slowdown of the reform process, and urged member states to reject the package.

"The difference between the compensation packages for EU producers and for African ones exposes the double standards and selfishness at the heart of the Commission's proposals," Luis Morago, head of Oxfam's Brussels office said Monday.

"Some of the poorest countries in the world can grow sugar much more efficiently than Europeans but they are being left high and dry by these proposals. This calls into question the EU's stated commitment to tackling global poverty," he added.

The Commission's proposals have to be approved by the EU agriculture ministers before they can be adopted.