EU sugar plan sparks bitter row

By Angela Saini for CNN

YOUR E-MAIL ALERTS

(CNN) -- Thousands of sugar farmers from Europe and Asia Pacific countries have been protesting over plans to reform Europe's sugar sector.

Demonstrations took place in Brussels Monday as Europe's agriculture council met for the first time to discuss sugar policy -- a process likely to conclude in November.

Reforms proposed by EU Agriculture Commissioner Mariann Fischer Boel in late June threaten to slash sugar prices by 39 percent and quotas by 30 percent.

Europe's biggest sugar producers are France, Germany and Poland, but the countries likely to lose out most under the reforms are low-yield sugar producers such as Italy, Greece and Ireland.

The Irish Farmer's Association says the livelihoods of 3,750 sugar beet growers could be wiped out. Sugar beet faces a 42 percent price cut under the proposed reforms.

African, Caribbean and Pacific countries, which have preferential access to European markets, also joined the protests.

A spokesperson from the Fijian sugar industry who is in Brussels told CNN: "We want a less drastic price cut spread over a longer period."

Britain, Germany, Denmark and Sweden are largely in favor of the reforms. Subsidies of $1.4 billion (£825 million) have kept European sugar prices three times higher than the rest of the world.

Cheap exports from Europe have also been blamed for stifling sugar industries in developing countries, including Brazil and India, the world's largest sugar producers.

Brazil, Thailand and Australia brought a challenge against the EU before the WTO last year, which ruled that subsidies to the sugar industry were illegal.

German Farm Minister Renate Kunast told The Associated Press on Monday that the commission's proposal was going "in the right direction."

Mariann Fischer Boel suggested in June that European farmers should receive between $7 billion and $8.75 billion in compensation over the five-year restructuring period, while ACP farmers will get $70 million in 2006, with payouts for a further seven years.

Oxfam policy analyst Penny Fowler said: "We are very glad that the EU is reforming the sugar sector but sugar industries in ACP countries rely on the high prices they receive in Europe. The EU is offering a miserly amount of compensation to ACP farmers compared to European farmers."

The sugar reforms will come into effect when the current policy expires on 1 July 2006.

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