The World Trade Organisation (WTO) ruled in Geneva last week that the EU was illegally pushing subsidised sugar onto the world market, opening the way to speed up the reforms, which Brussels already have in the pipeline.
EU Farm Commissioner Mariann Fischer Boel said she will take account of the WTO verdict, which confirmed an earlier decision, when she finalises the reform proposals.
“I am determined now to modernise our sugar regime to ensure it has a viable future,” she said, after the WTO ruled against the EU, following complaints by Australia, Brazil and Thailand that it depressed the world price and hurt their producers.
Adopting a tough stance, Ms Fischer Boel warned that she would go even further than the original reform plan, which included a proposed 33% beet price cut by 2007.
“Obviously 33% is not far enough,” she said. “I really want to make this a long-lasting reform and that is the way to do it.”
A radical EU reform of the industry could have a potentially devastating effect on the €140 million recently restructured Irish sugar sector, which has 3,700 beet growers, 288 staff, plus seasonal workers and a range of service providers including haulage contractors.
Irish Sugar, part of the Greencore Group, moved ahead of the EU proposals to place the sector in what it believes will be a strong position to meet the daunting challenges that lay ahead.
It closed Carlow Sugar Factory in March, as part of a major rationalisation programme, which involved the loss of 189 full time and 137 seasonal jobs.
All processing is being consolidated at the company’s factory in Mallow, which is being upgraded at an estimated cost of €25 million.
Irish Sugar chief executive Dr Sean Brady said the WTO ruling further illustrates the reality and scale of the threat which faces the sugar industry, not only in Ireland but across Europe.
“Our decision, in January, to rationalise sugar manufacturing in this country was taken in response to increased competition in the marketplace and the potential impact of EU regime reform.
“This verdict will undoubtedly have an influence on the reform proposals presented this summer. In light of that, Irish Sugar’s decision to rationalise the industry is timely.”
Dr Brady said future viability is the company’s objective and consolidating sugar manufacturing at one site in Mallow will help achieve it. “Irish Sugar is making a considerable investment in upgrading our Mallow facility to world-class standards and we are committed to continue manufacturing sugar in this country for the foreseeable future,” he said.
The initial reform proposals published last July by the European Commission provided for a proposed 33% beet price cut by 2007, a 16% European quota reduction by 2008 and other measures.
There was strong opposition from many of EU farm ministers including Mary Coughlan, who described them as unacceptable, as presented, because of the serious repercussions they would have for the industry in Ireland.
Movement on the proposals was suspended pending the WTO decision, but the real negotiations get under way when Madame Fischer Boel presents her revised plans in June.