Poor Countries Take Sugar to UN

The proposals are due to come up on the sidelines of the summit. Leaders from several African, Caribbean and Pacific (ACP) countries and from the least developed countries which supply sugar to the European Union (EU) will meet British foreign minister Jack Straw, development minister Hilary Benn and environment minister Margaret Beckett. Britain currently holds the rotating presidency of the bloc.

The meeting between the European Union (EU) and ACP representatives later week this will focus on EU policies on development, trade and agriculture, particularly in the sugar sector.

"As the main aim of the UN summit is to discuss the Millennium Development Goals, we want to point out that the EU's proposed reform of the sugar regime is not congruent to the bloc's development policy and indeed the goals," George Bullen, chairman of the ACP consultative group on sugar told IPS Wednesday.

The European Commission, the executive wing of the EU, announced radical plans to overhaul its sugar regime in June. The Commission is planning to cut the guaranteed price of sugar by 39 percent over two years from 2007, and offer 60 percent compensation for producers forced out of business by the price cut.

Under current rules, the EU offers a guaranteed price for sugar that is paid for in effect by consumers. Brussels buys from producers at about three times the average world market price.

The reforms became necessary after the World Trade Organisation (WTO) declared the EU policies illegal following a complaint from Australia, Brazil and Thailand.

But the proposed reforms will hit the sugar sector in ACP countries hard. These countries benefit most from the EU's current preferred price system, and they are urging the EU to impose less drastic price cuts spread over eight years.

ACP countries have a long tradition of supplying sugar to the EU under a trade agreement that has brought significant benefits to ACP economies.

The preferential access of ACP countries to the EU market currently represents some 70 percent of the revenue of their sugar sectors.

The loss of those privileges when the EU starts paying prices closer to market rates is expected to have a huge economic impact on many ACP countries that are dependent on sugar exports to the EU.

Bullen says the reforms will seriously affect poor countries' chances of meeting the MDGs.

"The European Commission's proposals for the reform of the EU sugar regime will significantly undermine the reform efforts of the ACP and LDCs (least developed countries), increase poverty, and wreak havoc on the livelihoods of hundreds of thousands of vulnerable poor sugarcane farmers and their dependents, all of which runs counter to the attainment of the MDGs," he said.

Bullen also stressed that sugar-producing ACP countries are being punished for fulfilling their side of the sugar agreement.

"We are not responsible for causing the disruption on the world market. The overproduction of sugar is not because of the ACP countries. We have fulfilled our commitments that have remained the same for the past 30 years -- 1.3 billion tonnes of sugar per year," he said.

Commissioner for agriculture Mariann Fischer Boel told members of the European Parliament that "I am convinced that we can manage imports without going back on our international commitments."

But members of the parliament accused the agriculture commissioner of putting WTO interests ahead of Europe. "Agreement with Europe is more important than with the WTO," said agriculture committee vice-chairman Friedrich-Wilhelm Graefe zu Bargindorf.

EU agriculture ministers will discuss the sugar reforms with ministers of the sugar-producing ACP countries and the least developed countries at an informal meeting next week.

Bullen says he hopes that talks at the UN will help with that debate.

"I really hope we will be listened to during the UN summit ahead of the agriculture meeting next week so that our concerns will be taken back to EU member states who will eventually vote on these reforms," he said.

Fischer Boel hopes to have a political consensus by November to present to the WTO ministerial meeting in Hong Kong in December. "It is essential that the EU is able to go to the WTO negotiations in Hong Kong with a clear outlook of the future of its sugar regime," she said.