Mixed reaction to sugar reform

The new reform package for sugar agreed in Brussels on Thursday (24 November) has triggered a mixed reaction from industry stakeholders.

NFU sugar chairman Mike Blacker said the deal, which is based on a 36% price cut over four years, with 64% compensation and a four-year industry restructuring scheme, at least ended the uncertainty hanging over the sector.

“We have achieved many of our objectives,” he said. “We have avoided a compulsory quota cut and decoupling has been agreed throughout Europe, with one or two exceptions.

“However, the extent of the price cuts will be extremely painful, and we regret the special deals that have been done for some countries.”

These include additional quota allocations and the ability to keep some compensation tied to production in member states which surrender more than half their quota.

NFU president Tim Bennett said much of the devil would be in the detail and called on British Sugar to ensure that growers got a fair price.

“The NFU will also want further talks with the secretary of state on the allocation of compensation for the steep price cuts.”

There are fears that, if this is subsumed into the single farm payment and shared out among all UK farmers, sugar beet growers will be at a competitive disadvantage to their EU competitors.

The sugar reform has drawn stern criticism from Third World lobby groups, who complain that, while huge sums of money will be made abvailable to EU processors and growers in the form of restructuring aid and compensation, Third world suppliers will lose out badly.

The deal actually includes a sum of €40m to help African, Caribbean and Pacific countries whose preferential access is being hit by the lower EU prices, with the promise of more money in future years.

But the amount available to the EU industry exceeds €7bn, claims Oxfam.

“The commission has hurled money at its member states to convince them to sign up (to the deal), but has abandoned some of the world’s poorest countries to destitution,” said head of Oxfam in Brussels, Luis Morago.

He also criticised a part of the deal which requires the commission to consider import restrictions, should imports from any developing country increase by more than 25% each year. “This is a direct betrayal of promises to grant full duty and quota free access for LDCs from 2009 under the eveything-but-arms initiative.”

The reform package has not gone down well in Ireland either, where it is assumed that the one remaining sugar factory will close.

Irish Farmers’ Association president John Dillon said it was “a bleak day for Irish tillage farmers”. “The compensation proposed is totally inadequate for the devastation of the industry.”

But Irish agriculture minister Mary Cloughlan said the final deal provided the Irish sugar sector with time and a range of options, with up to €310m available for compensation and restructuring.

Some €44m of this would go direct to growers if sugar beet production ceased in Ireland.