Brussels, 18/07/2005 (Agence Europe) - EU farm ministers met in Brussels on Monday, where they left little doubt as to the schism between them regarding the planned far-reaching reforms to the Common Market Organisation for sugar, adopted by the European Commission on 22 June 2005. Several Member States (Italy, Spain, Portugal, Greece, Poland, Ireland and Finland), enough to wield a blocking veto, vehemently oppose the Commission's plans. Belgium, Austria, Latvia and Lithuania also oppose them to a less extent. Seven Member States support the Commission's ideas (the UK, Germany, France, the Netherlands, the Czech Republic, Malta and Cyprus). Denmark, Sweden and Estonia called for more radical reform.
The first policy debate among Member States after the package of new legislation was unveiled by the Commission clearly revealed the problems facing the British Presidency to try and get ministers to reach agreement by November, to set a good example for the WTO Summit in Hong Kong in December, as desired by the European Commission.
The Commission reform proposals include a two-step cut totalling 39% in the price for white sugar; compensation to sugarbeet farmers for 60 percent of the price cut through a decoupled payment, merging A and B production quotas, establishing a voluntary four-year restructuring regime and introducing a private storage system when market prices fall below the reference price (see EUROPE 8975).
The EU farm ministers discussed the following areas of the European Commission's proposals:
Voluntary restructuring along with price cuts. Germany, the UK, France, Denmark, the Netherlands, Cyprus, Hungary and the Czech Republic support these measures. German farm minister Renate Kunast suggested staggered price cuts, 20% the first year, for example, and then 5% a year until market equilibrium is reached. Sweden and Estonia recommended bigger price cuts than those put forward by the Commission. Sweden called for the scrapping of quotas and transferring quotas from one Member State to another after the restructuring period (due to end in 2010). In the opposing camp, Greece, Portugal, Italy, Spain, Ireland, Finland (and to a lesser degree Poland, which has called for less radical changes) rejected these plans since they would lead to the end of sugar farming in their countries.
Long-term prospects (until 2014/2015). The Commission is suggesting this new sugar market organisation be in place until the 2014/2015 marketing year. This timeframe was welcomed by Germany, the UK, France, the Netherlands, Hungary, the Czech Republic, Malta, Estonia and Slovenia. Sweden wants a shorter period of reform, while Denmark said prices had to be slashed further before 2014/2015. Countries hostile to the proposed reforms, like Italy, Spain and Ireland, said it was pointless to talk about long-term prospects if farming would die out in the next few years in their countries.
Aid for sugarbeet farmers. The recommended 60% was approved by the UK, France, Malta and other Member States, but Denmark and Sweden argue that 60% is too much. Germany and the Netherlands said 60% could jeopardise budget neutrality. Some countries called for greater levels of aid - Hungary and Latvia called for 100%, Italy for at least 80% and other countries, including Spain, for more than 60%.
Sugarbeet farmers hold demonstration to save European sugar
Between 6000 and 8000 sugarbeet farmers from 21 EU Member States demonstrated in Brussels on Monday against the Commission's proposed sugar reforms, at the same time as the Council was looking at the issue. Farmers' groups fear the disappearance of 120,000 of the EU's 320,000 sugarbeet farmers in the next two or three years. 60% compensation for the price cuts and inherent loss of income was described as unsatisfactory by speakers at the demonstration, speaking right in front of the meeting where the farm ministers were meeting. Many demonstrators were unhappy with Brazil's low wages, describing them as close to slavery. They felt Brazil would be the only country to benefit from the planned reforms. German farm minister, Renate Kunast, addressed the demonstrators to argue in favour of the Commission's plans, describing them as a step in the right direction. She was heckled as she explained that the EU's sugar system had to be changed because the EU had lost at the WTO and was going to be left with 4 million tonnes of unsold sugar on its hands.