Bridges Trade BioRes • Volume 5 • Number 12 • 24th June 2005

EC Proposed Major Cuts in Sugar Prices: Sugar Firms, ACP Concerned

Discuss this articleShare your views with other visitors, and read what they have to say

On 22 June, the European Commission announced much anticipated reform proposals to its sugar protection regime (see Bridges Trade BioRes, 3 December 2004). The Commission proposal comes in the wake of a successful challenge to the European sugar subsidies at the WTO by Australia, Brazil and Thailand (see Bridges Weekly, 4 May 2005). The proposals include a 39 percent cut in the guaranteed price of white sugar; compensation to EU farmers for 60 percent of the price cut which would be linked to environmental and land management standards; and an assistance plan to the African, Caribbean and Pacific (ACP) Countries who have traditionally enjoyed preferential market access to the EU sugar market under a special arrangement with the EU. The proposed cuts have come up against strong criticism from sugar firms in Europe and key ACP sugar producing countries, who will see the prices they get for their sugar dramatically decrease. ACP countries have called for more time and compensation in order to adjust to this change through, among other things, diversification plans away from sugar and towards other uses of the staple crop. For example, Jamaica has plans to use sugar to make alternative, environmentally-friendly fuels such as ethanol and bagasse-based electricity generation plants. On the other hand, Brazil, the world’s biggest producer of sugar, has welcomed the proposals. The Commission hopes for political agreement on the much-anticipated proposals at its Agriculture Council in November 2005.

Details of the EC proposal are available on the EU website: http://europa.eu.int/rapid/pressReleasesAction.do?reference=IP/05/776&format=HTML&aged=0&language=EN&guiLanguage=en

ICTSD reporting; “Caribbean shocked as EU plans to end sugar regime,” Financial Times, 23 June 2005; “Sugar firms sour on subsidy cut”, BBC News, Thursday 23 June 2005; “EU sugar reform splits exporters” BBC News, 22 June 2005; “A requiem for preferential sugar,” The Jamaica Observer, 21 June 2005.