Sugar growers could be at risk from Latin American-EU trade deal

Proposals for freer global trade in the sugar market could put more than 100,000 farm businesses at risk, European farming bodies have warned.

The EU Commission has proposed allowing the Mercosur trading bloc countries – Argentina, Brazil, Paraguay, Uruguay and Venezuela – greater access to European markets, including sugar.  

Negotiations are expected to start at trade talks in early December but four European farmer bodies have expressed outrage at its inclusion, warning the EU Commission it will put livelihoods at risk(see box).

A joint statement by the four groups said that further opening of the EU sugar market would “imperil many of the 140,000 farmers, 30,000 employees, and hundreds of rural communities whose livelihoods depend on the sector”.

And the group issued a warning to the commission:

“EU sugar beet growers, sugar producers and workers stand determined – we will not pay for the offensive interests of other industrial sectors or for those of the Brazilian state-supported sugar-ethanol regime,” it said.

The four EU farming bodies

  • CIBE – International Federation of Beet Growers
  • Copa Cogeca – European Farmers and Agri Co-operatives
  • EFFAT – European Federation of Food, Agriculture and Tourism Trade Unions
  • CEFS – European Association of Sugar Manufacturers

Copa Cogeca secretary general Pekka Pesonen added that the Mercosur countries had developed sophisticated domestic support schemes and the EU was already a major net importer of their agricultural produce.

“We need fair and balanced trade agreements that ensure that we do not have surpluses on our market.

See also: Adapt farm businesses now to thrive after Brexit

“EU farmers and their co-operatives should not be penalised when the EU negotiates free trade deals. They cannot afford additional income losses resulting from a trade deal which puts more pressure on the EU sugar, ethanol and beef markets in a trade deal,” Mr Pesonen said.

Stark warning

CIBE president Bernhard Conzen said he believed the sector would hit “a major and very painful crisis”. 

“The commission is actually asking beet growers and processors to make sacrifices for Brazilian interests, which is totally unacceptable.

“Ever higher standards for ever lower prices for us, and ultimately importing lower standards, is incomprehensible and a nonsense for farmers,” said Mr Conzen.

Leaders from the two other farmer bodies involved, the CEFS and EFFAT, warned that the risk of beet factory closures was high and that whole communities could suffer.

CEFS president Johann Marihart said: “The commission continues to dream that our sector is able to handle further opening up of the market without consequences, and continues to hide from reality.

“It might as well tell us which factories in the EU would have to close.” 

 And EFFAT secretary general Harald Wiedenhofer warned that the employment impact could be devastating.

Unknowns and opportunities: what does it mean for the UK?

The NFU is part of the Copa Cogeca group and the union’s commercial analyst for sugar, Arthur Marshall, said Brexit added a further layer of unknowns and possible opportunities to the situation.

The EU/Mercosur talks, which begin on 4 December, are part of an ongoing negotiation between the two trading blocs, Mr Marshall explained.

“The negotiations are already complex and cover many different products but for sugar they come just weeks after the EU quota regime ended on 1 October,” he said.

“The situation is therefore fluid and could take a number of different courses. But for us, with Brexit under consideration, there are still clear elements we must press our own government for now,” Mr Marshall said.

“The concerns of the EU farmer bodies highlight the potential dangers of an unlevel playing field,” he said.

“Here in the UK we must, therefore, continue to press our own government to appreciate the intricate systems and extent of support enjoyed by competitor countries that could put us at a disadvantage.

“We must have a level footing for UK farmers and work closely with the government to make this happen or we will not be able to exploit the potential opportunities which Brexit may bring for home-produced sugar,” he said.