Thursday, December 09, 2004

New member states flex muscles on sugar reform

Although they are to receive full rather than phased in payments under the Commission's proposals to deal with the unreformed sugar regime, a number of new member states have been lining up to try and dilute the reform, perhaps giving a hint of the way in which EU agricultural politics is moving.

Hungary, Latvia, Lithuania and Slovenia have signed up to a letter sent to Commissioner Boel arguing that production must be kept intact across the whole EU. Finland, Greece, Ireland, Italy and Portugal are also signatories to a letter which effectively calls for a policy that would freeze the existing distribution of sugar production. However, the Czech Republic, Poland and Slovakia are also said to be sympathetic to this 'conservative' or effectively anti-reform position.

Ranged against them is a smaller group of reform states: the usual suspects (Denmark, Sweden and the UK) plus one new member state (Malta). The UK's stance is in spite of the fact that research suggests that a 25% cut in the UK's production quota could lead to a 54% fall in the area under sugar beet. Germany and the Netherlands have some sympathy with this position.

Finland could be bought off by special measures for its Less Favoured Areas. France has advocated a more geneous restructuring fund. This could be a way forward, as it would allow restructing to proceed, but with more generous side payments to those who lose out.

Commissioner Fischer Boel has warned that it is unrealistic to expect sugar production to continue in all member states. Meanwhile, the Commission's proposals are under fire on from Oxfam.

Proposals not so sweet for Global South

Oxfam has argued that the Commission's proposals take too little account of the needs of traditional sugar suppliers. Oxfam emphasises the rather flimsy nature of the Commission's proposals for ACP countries and India. They current benefit from access to the EU market at high guaranteed prices which would be cut under the Commission's proposals.

Oxfam argues that prices should be kept high for a time to permit restructuring in poorer countries such as Mozambique and Zambia to allow them to compete on the world market. Such countries suffer from dilapidated transport systems and other infrastructure problems. Quite how long it would take to rectify these problems is unclear, but Oxfam recommends shallower price cuts over a long period.

This proposal has drawn the fire of the European chocolate, biscuit and confectionery industry (CAOBISCO) who effectively argue that Oxfam want to have their cake and eat it. They argue that the Oxfam proposals would artificially stimulate investments directed at an already oversupplied European market.

Beet and biodiversity don't mix

Support for cutting beet production in Europe comes from the Worldwide Fund for Nature who argue that it may be responsible for more loss of biodiversity than any other crop. They argue that it leads to loss of natural habitats, intensive use of water, heavy use of agro-chemicals and discharge and run-off of polluted effluent.

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