EU Sugar Industry to Get Radical Overhaul
July 15, 2004
Agriculture Commissioner Franz Fischler has outlined a radical overhaul of the EU’s sugar industry with measures to cut quotas for producers, guaranteed prices and direct subsidies.
The current regime "has come under fierce criticism for misallocating resources, hampering competition, harming developing countries and giving consumers, taxpayers and the environment a raw deal," he said.
The planned proposals look set to hit the least efficient producers hardest, in a bid to tackle over-capacity. EU–wide some 17.4 million tons of sugar are produced every year, much more than can be consumed domestically.
Current rules, framed almost 40 years ago, ensure a basic price per tonne of sugar, three times the market price. The knock on effects range from overpricing in the domestic market to unfair trade on the world stage, according to some.
However, ahead of difficult negotiations between the EU’s members, environmental and fair trade campaigners say the moves are not enough.
"The European Commission’s sugar reform proposals will not reduce poverty or achieve higher environmental standard," Oxfam and the WWF said in a joint statement.
Job losses likely
On the other hand, industry predicts the measures will mean a loss of profits as well as redundancies. Demonstrators from at least three countries gathered outside the building where the proposals were unveiled, protesting against what many think will mean the loss of their livelihood.
While the Commission accepts that job losses are likely, particularly in places like Spain, Portugal or Italy, where the price of production is relatively high, Fischler said that these jobs are not even secure without the proposed reforms - citing 17,000 job losses in the sector in the past decade.
He also said that funds would be made available for companies who are no longer competitive in the sector or who want to restructure. Farmers will be given four years before the new system is fully in place.
The matter will now have to be discussed by ministers from each of the EU member states and opposition is likely.