| EU countries agree on sugar sector reforms, to cut prices |
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BRUSSELS: European Union agriculture ministers reached a landmark agreement Thursday to reform the bloc's subsidy-predominated sugar policy, to reduce prices by 36 per cent over the next four years and to offer payoffs to farmers ready to abandon beet growing. The immediate falloff of this measure, according to analysts, will be a sharp decline in sugar production in the bloc and possibly shut down of several production units and resultant job losses.
The EU's sugar policy had been resisting reforms since the 1960 and in spite of the WTO describing the member-states' sugar exports as illegal. The worst affected had been the Third World countries, who could not match the EU countries in price terms. The WTO had ordered the bloc to amend its sugar policy by mid-May following representations brought by Brazil, Australia and Thailand.
EU's agriculture commissioner Mariann Fischer Boel, who had initiated the reform process, said she could manage to get a compromise with very broad support from the Council (of ministers). "We have had the usual bargaining, but the outcome seems to be a reasonable one. The final decision was a (price) cut of 36 per cent over a four-year period and there will be compensation for farmers of 64.2 percent."
Greece, Poland and Latvia had disagreed with the general consensus, sources at the meeting said. However, countries like Italy, Sweden and Austria walked away with specific concessions for their sugar industries using their combined might to pressure the European Commission. The Commission was keen on a reform package before December meeting in Hong Kong of the WTO's 148 members to discuss a new global trade round.
The proposed steps will bring in a major change in the EU's supply structure with lower output and exports, offset by more imports from Third World producers like Malawi and Sudan. Several EU countries may opt out of sugar production.
The agreement provides for 6.3 billion euros in compensation to farmers stopping beet cultivation. The compensation paid above the basic 64.2 per cent rate will mostly be met by EU, while the rest will be from the concerned individual countries.
EU countries together had been dumping six million tonnes of subsidised sugar on world markets.
The agreement brought sharp reaction from aid agencies, which said it would harm Europe's raw sugar suppliers in countries like Burkina Faso and Sudan, as well as former European colonies in the African, Caribbean and Pacific group. Oxfam International's head Luis Morago said developing countries have been sacrificed in order for Europe to reach a deal. He said: "The Commission has hurled money at its member states to convince them to sign up but has abandoned some of the world's poorest countries to destitution.
Posted
on : Sat, 26 Nov 2005 06:40 GMT | Politics News
By : Mike Lawson
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