Opinions split in CEE over EU sugar reform

- Last updated on GMT

Related tags: Member states, European union

Plans for EU sugar reform are unfair and would only benefit the
biggest producers, according to 10 member states including
Slovenia, Hungary and Latvia, as new discussions split opinions in
eastern Europe, reports Chris Mercer.

Existing proposals to reform the sugar sector go against the fundamental principles of the EU's common agricultural policy, said Slovenia, Latvia, Hungary, Lithuania, Finland, Greece, Ireland, Italy, Portugal and Spain in a letter to the new EU agriculture commissioner, Mariann Fischer Boel.

In the letter, these countries reportedly agreed that the sector needed reform but that price reductions should be much more gradual than those proposed. Furthermore, they argued that quota reduction should mostly target the biggest exporters among member states.

The countries' comments came as the EU Council of Ministers, involving agriculture ministers from all member states, met to discuss the Commission's proposals for reform.

Under current plans, designed by Boel's predecessor Franz Fischler, minimum sugar beet prices would be cut by more than a third, from €43.6 per ton to €27.4, in two steps over three years, and the total EU production quota would come down by 2.8 million tons to 14.6 million by 2008/9.

The ten complainants called for existing distribution of sugar beet and sugar production across member states to be maintained. That would leave France and Germany, easily the EU's biggest sugar producers, to bear the brunt of reform, but with Poland and Italy also hit hard.

Slovenia is one of the smallest sugar producers in the EU and agriculture minister Milan Pogacnik said reforms may jeopardise the existence of its only production factory. Last year a study by the EU Commission found that all 10 of the signatories' industries could be ruined by reforms.

At a press conference, Boel refused to discuss reform proposals but said it was crucial that members reached a political agreement before the meeting of World Trade Organisation (WTO) ministers in December next year.

Boel added that any legislative proposals would have to wait until the result of an EU appeal against a recent WTO decision declaring EU subsidies to sugar producers as illegal.

Somewhat controversially, Slovakia, also a small-time sugar producer in the EU, confirmed its support for the EU reforms on the basis that they will reduce prices for consumers.

Katarina Czajlikova, of the Slovakian Agriculture Ministry, qualified this by saying the government still had concerns that smaller producers might find it hard to compete if prices were reduced too much, and a reduction in member states' quotas must reflect relative production levels.

Czajlikova said that provided these concerns were resolved, "Slovakia will benefit from the reform as we will have a consolidated sugar industry and the benefits of the sugar regime will be more fairly distributed between producers and consumers"​.

The EU produces between 19 and 20 million tons of sugar every year which accounts for 14 per cent of world sugar production. Earlier this year the Commission ruled out ending member states' subsidies on the basis that EU sugar production would collapse in the face of cheaper imports from the southern hemisphere, namely Brazil, which is now the world's biggest exporter.

Related topics: Commodities, Cocoa & Sugar, Ingredients

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