Sugar reform opposed by 10 of 25 EU members

AGRICULTURE ministers from Ireland, Italy, Spain, Greece, Portugal, Finland, Hungary, Latvia, Lithuania and Slovenia told EU Agriculture Commissioner Mariann Fischer Boel this week that her sugar plan would cost thousands of jobs and devastate farmers and processors.

Sugar production is likely to cease in the 10 countries under the EU plan to slash price guarantees by a third and trim production quotas.

Net exporters, and the member states which cause the EU quota to be exceeded would be hit hardest.

The 10 countries' alternative sugar reform plan includes a significantly reduced and more gradual price cut. They also opposed a proposed transfer of quotas among member states.

At this week's EU Council of Farm Ministers, the UK, Denmark, Sweden, Germany, Estonia, Malta and Cyprus were the most supportive of the European Commission's sugar plan.

Fischer Boel said the possibility of keeping up production in all member states seemed to be difficult, and the EU must open its sugar market to imports before December 2005.

"It is crucial that a political agreement be reached before the meeting of World Trade Organisation ministers in Hong Kong next year,' she said.

However, her detailed legislative proposals on overhauling the EU sugar market will have to await the result of an EU appeal against a WTO ruling on European sugar exports, expected in March or April. Fischer Boel said this WTO ruling threatens 20 to 25% of European sugar production.

Meanwhile, in the Dail, Agriculture and Food Minister Mary Coughlan said a great deal of work, such as the forming of alliances, and compromise will be required if Ireland is to retain its sugar industry. "It seems likely that we will find it very tough." She pointed out that the French are vehemently opposed to Ireland's stand on sugar.

Fine Gael spokesperson Deputy Denis Naughten said farmers face a loss of up to €26 million per annum. "There are 8,000 jobs involved directly and indirectly. Ireland is self-sufficient in sugar, and we do not have a difficulty in over-production, as do other countries."

This week, Greencore's chief financial officer, Patrick Kennedy, said some change to the EU's sugar subsidies regime is inevitable. But Greencore is well positioned to cope with change, as sugar is now only 15 or 16% of their turnover.