Sugar reforms far from sweet
THE European Union cannot let its 35-year old sugar regime gather dust, undisturbed, in a forgotten corner, according to Agriculture and Rural Development Commissioner Mariann Fischer Boel.
Today in Brussels she will unveil proposals for the sweeping reform of an industry that comprises 56 companies with 143 factories and provides an income for a million people. Leaked versions of what is likely to be proposed have led to growing fears they will wipe out Ireland’s 80-year-old sugar and beet industry.
A 42% price cut is being mentioned but some experts think a combination of factors could increase this to 47%. The sector here involves 3,700 farmers, who grow beet on 80,000 acres.
The crop is worth around €80 million a year to the growers. Some 288 direct jobs are provided in sugar processing - now concentrated at one plant in Mallow - while 240 hauliers, seasonal campaign workers and many others along the supply and service chain benefit.
There is strong opposition to the anticipated proposals in Ireland, but Agriculture and Food Minister Mary Coughlan has promised a strong defence of the industry. However, Commissioner Fischer Boel, who will be in Ireland tomorrow and Friday, is clear on her vision on how Europe’s sugar regime should be reformed. Tough negotiations are expected.
She said the EU needs, firstly, to find a better fit between its sugar market and the rest of the Common Agricultural Policy (CAP). The broom of reform has already swept through most agricultural sectors.
The Commission has a legal mandate to examine reform options and it has been doing so.
“EU farm ministers will then decide a model for the future. We hope, one that will restore the symmetry of the CAP, giving beet farming and sugar production the same market orientation, the same flexibility, the same environmental disciplines that most other forms of agriculture in the EU now enjoy.”
Ms Fischer Boel went on: “Second, if the EU doesn’t decide now on a new form for its sugar regime, external forces will decide it for us, with a rather more brutal logic than we would apply. Analysis was clearly showing two years ago that the industry would soon be heading towards the cliff edge.
“If we didn’t slash our internal price - which, at three times the world level, creates enormous distortions - the market would tip over and only deep cuts to home production would restore balance. This was one of the findings.
We can no longer subsidise extra sugar exports to balance out preferential imports and, second, unsubsidised exports will have to go.”
Ms Fischer Boel said the old methods for stabilising the market will no longer work. A new approach is needed.
The Irish Farmers’ Association national council has given its Sugar Beet chairman Jim O’Regan unequivocal support to defend the interests of beet growers.
He said the leaked EU proposals would wipe out growers and were totally unacceptable.
“The livelihoods of farm families are at stake. If the EU Commission intends to kill off an industry adequate and proper compensation will have to be paid to beet growers.”
Mr O’Regan challenged the Commission to help establish alternative, viable enterprises for the Irish tillage sector.
Ms Coughlan, who will be leading Ireland’s negotiating team, said the Commission’s initial ideas for reform last July would, if adopted, have serious repercussions for sugar beet growing and processing. She had made it clear in discussions in the Council of Ministers that they were unacceptable.
MsCoughlan said the next step would be the publication of formal legislative proposals by the Commission.
The recent ruling by the WTO appellate body will certainly add to the pressure for reform. There have been suggestions that when the reform proposals emerge, they may be even more severe than expected.
Ms Coughlan said her overall objective will be to ensure that the future shape of the EU sugar regime is consistent with the continuation of an efficient sugar beet growing and processing industry in this country.
Meanwhile, a study for the European Commission has increased the fears of the industry here, now being rationalised by Greencore Irish Sugar.
Mallow Sugar Factory, where all processing is now being consolidated, is being upgraded at a cost of €25 million to allow it to efficiently manufacture Ireland’s 199,260 tonne a year sugar quota from September.
Yet, the study for the European Commission named Ireland, as well as Italy, Portugal, and Greece as EU member states where sugar production might be abandoned.
But these findings have been hotly disputed by Irish growers.
