EU sugar regime not so sweet for the poor and the environment | WWF

EU sugar regime not so sweet for the poor and the environment

Posted on
22 June 2005
Brussels, Belgium – The European Commission has missed a golden opportunity to help some of the poorest people in the world raise themselves out of poverty sustainably said WWF, following the release of the EC’s proposals for the reform of its sugar regime.

In its proposals, the Commission has done the bare minimum to comply with the World Trade Organization’s recent ruling that the EU has been producing too much sugar and illegally dumping the excess on world markets.

According to the proposal, a whole range of support for EU sugar producers will still be more than generous, including: the creation of more than one million tonnes in total of sweetener quotas; grants for sugar storage; sugar production exemptions for certain industries like pharmaceuticals from quotas; and compensation for farmers and processors adversely affected by the reform.
But if the EU has looked after the interests of its own industry, it has turned a blind eye to the needs of some of the world’s poorest people.

Under the current regime, impoverished sugar farmers around the world have been undercut by subsidized EU sugar and locked out of the European market for decades. This in turn has made it impossible for them to invest in reducing the environmental impacts of their crop by using efficient irrigation systems, or implementing techniques to reduce soil erosion and pollution.
"Sugar is a far more important crop for poverty reduction and the environment in developing countries than it will ever be in Europe," said Elizabeth Guttenstein, Head of European Agriculture at WWF.

"WWF is asking the EU to provide sufficient aid to all developing countries which could use sugar to trade themselves out of poverty, to help them develop their industries, and make them more environmentally sustainable."
Under the proposed reforms, the EU will still spend €30 million dumping sugar on world markets and the severe restrictions on the import of sugar from developing countries will remain in place until 2009.

The developing countries which currently have preferential access to EU markets (African, Carribbean and Pacific countries) have been offered a mere €40 million a year to adjust to the reforms compared to the €1.5 billion ear-marked to compensate European farmers. Other developing countries (the Least Developed Countries), for whom sugar represents one of their only opportunities to generate income, will receive nothing.

WWF is calling for a minimum of €500 million a year in adjustment for the ACPs and at least as much for the LDCs.

"The EU is constantly repeating its commitment to sustainable development, yet with this proposal it has passed up an excellent opportunity to help create a more just and sustainable world," commented Guttenstein.

"These reforms are a good deal for Europe, but a bad deal for the poor and the environment."
On 28 April, the World Trade Organization ruled that the EU’s sugar regime was illegal.

The European Commission’s proposal will now be discussed and voted on by the Council of Ministers. A final decision is expected during the November meeting of the Agriculture Ministers, in advance of the WTO Ministerial Meeting in Hong Kong in December 2005. 

The European Commission legal proposals for reform include the following:

• A 39 per cent reduction of the price paid to European growers and those exporting to the EU;
• €1.5 billion to compensate growers in Europe for 60 per cent of the value of the price cut;
• The creation of more than one million tonnes of new quota;
• The removal of substantial volumes of some types of sugar from the existing quota system – effectively creating even more demand for excess production. 
• Generous aid for factories that close and give up their quota with a top-up payment to sugar growers. 
• The continuation of market management policies and refunds for the use and export of sugar in Europe. 
• Only €40 million investment in Action Plans to help ACP countries currently exporting to Europe to adjust. 
• No help to the Least Developed Countries. 
For further information:
Catherine Brett
Agriculture and Rural Development Communications Officer
WWF European Policy Office
Tel: +32 2 740 0936

Elizabeth Guttenstein
Head of European Agriculture and Rural Development
WWF European Policy Office
Tel +32 2 740 0924
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