European Commission plan on sugar: a sour deal for world’s poorest, says Oxfam

Brussels – The proposal from the European Commission on Europe’s sugar regime will have damaging impacts on some of the world’s poorest economies while benefiting rich European farmers and processing companies, the international aid agency Oxfam International said today.

European Commission presents its proposal for a reformed sugar regime

"EU sugar policies must to change, but today's proposals will hurt many farmers in poor countries. Poorer countries need time and support to adjust to the reform. Member States should listen to developing countries' calls for a more gradual price cut over a longer timetable and improved access to EU markets," said Luis Morago, Head of Oxfam International office in Brussels.

"The steep, sharp price cut will be very damaging for poor African countries and the overall reform package doesn't guarantee an end to EU overproduction and dumping," Morago added.

The European Commission has proposed a 39 per cent cut to Europe’s support price for white sugar and another of 42 per cent to its beet price over two years from 2006-08. It has also proposed a restructuring fund, known as the “buy-out scheme,” designed to help European sugar producers to leave the sector.

To compensate for the steep price cut, the African, Caribbean and Pacific (ACPs) countries will receive €40m for the year 2006. The amount will be distributed among 18 countries. Oxfam called earlier this month for Europe to give ACPs at least €500m and also to give adequate adjustment assistance to all Least Developed Countries (LDCs) sugar-producing countries not covered by the current proposals.

“The meager compensations scheme means that factories will close down, workers will lose jobs, families will starve, and some of the poorest countries in the world will be robbed of the sweeter future that they could enjoy. This is a harsh, blunt reform package that will hurt the most vulnerable."