Fischler resists calls for cut in sugar prices

Date: 14/09/00

By Simon Taylor

FARM Commissioner Franz Fischler has decided to delay major reform of the Union's controversial sugar regime, despite calls from several member states and sugar users for a cut in prices.

Fischler will table plans next week for modest changes to the policy, which forces buyers such as soft drinks manufacturers and food companies to pay three to four times world market prices for the commodity.

Some member states have demanded a reduction in the guaranteed price which sugar- beet growers receive. But Fischler will instead call for an end to storage aids which compensate processors for keeping sugar off the market. He will also propose a small cut in the total amount of sugar beet grown in the Union, shaving around 100,000 tonnes a year off the annual total of 18 million tonnes.

The EU is already planning to cut quotas by 500,000 tonnes this year to meet its World Trade Organisation commitment to reduce spending on export refunds gradually. Commission officials say Fischler has rejected calls for a reduction in sugar prices because the Union budget is so tight. "A 10% cut in the intervention price would have cost €450 million and the money simply is not there," said one.

The proposals to be unveiled by Fischler next week will come under fire from several EU governments which want to see a bigger reduction in prices. The UK, Sweden and Denmark are all expected to call for cuts ranging from 5-20% and could win Italy's support, giving them enough votes in the Council of Ministers to force more radical reform.

The proposals have also been criticised by food and drink manufacturers, who buy 70% of the Union's sugar production. Alain Beaumont, secretary-general of the Committee of Industrial Users of Sugar, said: "You need to lower sugar prices more.

Farm Commissioner Franz Fischler has decided to delay major reform of the Union's controversial sugar regime, despite calls from several Member States and sugar users for a cut in prices.