Plan to open sugar trade threatens big quota cuts

17 November 2000

Plan to open sugar trade threatens big quota cuts

By Philip Clarke

A MAJOR contraction of the UK and EU sugar industries, characterised by factory closures and an exodus of producers, is on the cards, unless controversial plans to liberalise the market are overturned in Brussels.

The proposal, known as the "Everything But Arms" initiative, would see the EU sugar market opened up over the next three years to the worlds 48 poorest nations, British Sugar director, Simon Harris, told a crisis meeting of growers and suppliers in Peterborough this week.

Starting in January, import tariffs and quotas for these countries would be cut 20% in year one, 50% in year two and would disappear in year three.

British Sugar and the NFU believe that, in a worst-case scenario, EU quotas could be cut by 40%, leading to significant restructuring and the loss of beet growing altogether in some areas.

"These countries produce about 2m tonnes of sugar a year," they say in a recent joint letter to growers. "But a significant number of them have the potential to rapidly expand their sugar industries."

This could boost production to 5m tonnes, or 40% of EU output, with each tonne coming in leading to a 1t cut in sugar quota.

NFU sugar beet vice-chairman, Mike Blacker, told the meeting that UK farmers were already suffering a 30% disadvantage because of the problems with the £. "It wont take much of a drop in quota or price for sugar beet to become a marginal crop."

Industry representatives met with MPs from key beet-growing areas in London on Wednesday. But the final decision will be taken in Brussels, and the concern is that agriculture ministers may not even get a look-in.

According to the BS/NFU letter, the matter will be determined under the Generalised System of Preferences. A GSP working party is due to meet next Monday, (Nov 20), and will feed its findings into the General Affairs council, made up of foreign ministers, on Dec 4.

NFU sugar beet adviser, Helen Kirkman, who was in Brussels this week, said time was running out. The commissions trade and agriculture directorates were frantically trying to put together an impact assessment to feed into the GSP working party. "It is clear there has been insufficient consultation on this. It is essential we get this on to the agenda for the next agriculture council, so they can have their say."

The NFU has widespread support in its opposition to the plan from other European beet grower and processor groups. African, Caribbean and Pacific (ACP) countries, which already have preferential access to the EU, are also opposed.

Much will depend on the French presidency, which can determine how quickly the matter progresses and what shape it takes.

While it will be reluctant to upset its own beet growers, it will be keen to win support from less developed countries, making it easier to defend the rest of the CAP within the World Trade Organisation. &#42

Marginal crop? Beet growers could face quota cuts of up to 40% if the EU sugar market is opened up to poorer nations, experts reckon.

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