Oxfam calls for an end to subsidised EU sugar exports

In a hard-hitting report released on the August 22nd 2002, Oxfam UK criticised the EU sugar regime for destroying livelihoods in developing countries such as Mozambique (not a traditional beneficiary of ACP sugar preferences, although a recent beneficiary of EBA sugar access). While recognising the benefits gained by ACP countries from the existing EU sugar regime, the Oxfam report highlighted the anomaly of one of the least efficient sugar producers being one of the world's leading refined sugar exporters. The report argues that the EU's sugar export regime encourages the supply of high cost EU sugar to the world market (with the benefit of export refunds) in ways which depress the world market price and undermine the development of competitive sugar production and value added sugar processing in developing countries. The report also highlight the exceptionally high profits generated by sugar sector millers that are virtual monopoly producers in many EU member states. The case of British Sugar in the UK which, as a result of the current EU sugar regime, makes exceptionally high profits compared to other food-sector enterprises in the same corporate family, was highlighted. Oxfam's immediate call was for an end to subsidised EU sugar exports and for additional market access for LDC and ACP suppliers. The web site of the Sugar Traders Associations of the United Kingdom maintained that this demand was not 'inconsistent with keeping a higher price in Europe than on the world market in order to permit remunerative prices for sugar growers'. Comment: Oxfam's call to end subsidised exports needs to be seen against the background of the CAP mid-term review's renewed emphasis on moving over to an extended system of de-coupled farm support, which would cover a wide range of products and leave farmers involved in the scheme free to choose which crops to grow depending on market signals. Such an ultimate objective would inevitably require a substantial reduction in the EU sugar price, perhaps by amounts similar to those currently being proposed in the rice sector. While there is no suggestion that sugar should be included in this multi-product system in the short term, beyond 2007 it is evident that the European Commission would like to see sugar included in this single multi-product scheme of de-coupled farm support. The web site of the Sugar Traders Association of the UK draws an analogy between future developments in the EU sugar sector and current proposals for reform of the EU rice regime. With an established timetable for the phasing in of duty free access for least-developed-country sugar exports and a challenge to the EU sugar regime in the WTO being mounted which would limit the EU's capacity to dispose of sugar on world markets with the benefit of export refunds, an acute market situation similar to that currently faced on the EU rice market could in due course emerge in the EU sugar market. A shift towards increased direct aid-payments to EU sugar-beet farmers linked to a dramatic reduction in the EU sugar price beyond 2006 should not therefore be ruled out.In a hard-hitting report released on the August..