Commission refuses to root up its sugar regime reform

By David Cronin

Date: 10/03/05

The European Commission is insisting that it will not change the main points of its proposal for reforming the EU's sugar regime, even though they have been sharply criticised by MEPs.

A resolution to be debated in the European Parliament today (10 March) takes the EU executive to task for recommending a one-third cut of the guaranteed sugar price in 2005-07. Proposed by the assembly's agriculture committee, the resolution says that the stability of the European sugar market could not be assured if such a reduction occurs.

The Commission is likely to present a formal proposal on sugar reform in June or early July. Michael Mann, the institution's spokesman on agriculture, said this would be "along the same lines" as the reform blueprint presented last year by Franz Fischler, the then farm commissioner.

"The legislative proposal will not be exactly the same but it will suggest that we cut prices sharply and cut [production] quotas sharply," Mann added. "We have got to be producing sugar in a way that is economically viable and competitive. It would not make sense to leave the sector unreformed."

The Commission's proposal is to follow a ruling - scheduled for late April - from the World Trade Organization in a case brought by Brazil, Thailand and Australia. The three claim that the way the EU supports its sugar beet production system violates the rules of global commerce.

French Socialist MEP Jean-Claude Fruteau said that the Commission would have to "change considerably" its proposal if it is to be accepted by EU governments. An agreement on reforming the Union's sugar regime, he continued, would be essential for reaching an agreement on bringing the Doha round of world trade talks to a successful conclusion at a Hong Kong ministerial conference in December.

Ten of the EU's 25 governments have registered a letter of protest over the Fischler plan. It has met particular resistance in Finland, Ireland and Poland, as theyfeel the cuts in guaranteed prices and quotas would jeopardise the future of their sugar industries.

It has also aroused consternation from some poor countries, which depend heavily on sugar exports. Jamaica's Agriculture Minister Roger Clarke recently said the suggested price cuts were "too drastic", estimating they could cost his country €23 million in yearly foreign exchange earnings.

Stefan Lehner from the European committee of sugar manufacturers - known by its French acronym CEFS - said the plan would "go too far as it would mean the European sugar sector is the only stakeholder to have to adjust production".

Oxfam, the anti-poverty advocate, has castigated the current regime for allowing the EU to undermine small producers in African and Caribbean countries by flooding their markets with subsidised sugar. The group's spokesman Louis Belanger urged the Commission to present a more "pro-development" proposal than the Fischler one.

More than 30,000 new jobs could be generated in Zambia and Mozambique, Oxfam has calculated, if they were allowed increased access to the EU sugar market at fair prices.

The European Commission was insisting that it would not change the main points of its proposal for reforming the EU's sugar regime, even though they had been sharply criticised by MEPs. The Commission's proposal, expected to be tabled in June or early July 2005 was to follow a ruling - scheduled for late April - from the World Trade Organization in a case brought by Brazil, Thailand and Australia. The three claimed that the way the EU supported its sugar beet production system violated the rules of global commerce.