Brussels unveils sugar industry shake-up

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The Independent Online

The European Commission unveiled yesterday the biggest shake-up of the sugar industry in four decades, calling for huge cuts in guaranteed minimum prices and export subsidies.

The European Commission unveiled yesterday the biggest shake-up of the sugar industry in four decades, calling for huge cuts in guaranteed minimum prices and export subsidies.

The plan, which would produce a partial liberalisation of the sector, provoked a muted response from British manufacturers. But was condemned as insufficient by campaigners who said it would do little to ease the plight of Third World producers.

Launching what he described as a "third way" reform, the EU's agriculture commissioner, Franz Fischler, argued: "Simple liberalisation of the EU sugar market would not just spell the end of sugar production in the EU, it would also be counter to the interests of sugar producers in many Third World countries who cannot compete with the producers in Brazil."

Under the plan, which needs to be approved by EU agriculture ministers, price support will be cut by 30 per cent but a floor of €421 (£281) per ton - well above the world market price - will be maintained. The minimum price for sugar beet will be cut from €46.3 per ton to €27.4.

Export subsidies will be reduced by €1.3bn, the overall production quota of 17.4 million tons will drop by 16 per cent, and there will be compensation for producers that leave the sector. Under the scheme, quotas will be tradable between producers operating in different member states. That would allow efficient producers to buy up quotas from countries whose industries fall by the wayside.

In response, British Sugar said it is "well-placed to meet the challenges of reform".

Mr Fischler conceded the plans are unlikely to resolve the EU's problems with the World Trade Organisation over sugar.

Oxfam and WWF said the reform proposals will not reduce poverty or achieve higher environmental standards.

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