European Commission's Proposal Would Hurt Poor Farmers, says Oxfam

Published: 1 November 2005

Brussels – The European Commission’s (EC) proposals to reform its sugar regime will have devastating effects on some of the world’s poorest countries, international agency Oxfam said today.

Brussels – The European Commission’s (EC) proposals to reform its sugar regime will have devastating effects on some of the world’s poorest countries, international agency Oxfam said today.

The EC is set to announce its proposals on Wednesday (June 22) – but a leaked draft version has already been widely criticized by developing country governments and their sugar industries, the Spanish government, other European Union (EU) member states, producers and sugar workers in Africa and Europe, trade unions, and development and environmental NGOs.

“An EU sugar reform is needed to end export dumping and improve access to Europe’s market for poor countries. But this proposal in its current form will badly hurt some of the poorest countries. They won't get the investment desperately needed to build up their sugar sectors over the long-term because the EC's price cut is too steep,” said Oxfam spokesperson Luis Morago.

The EC is set to recommend 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 is also set to propose a restructuring fund, known as the “buy-out scheme,” designed to help European sugar producers to leave the sector.

“There is no guarantee that this approach will reduce over-production and end dumping on poor countries,” Luis Morago said. “Ahead of the WTO Ministerial in Hong Kong later this year, the EC has again failed to live up to its pro-development rhetoric.”

“This proposal will only profit the biggest farmers and large processing companies,” Morago said.

The EC is set to propose €40m compensation in 2006 for sugar-producing countries in the Africa, Caribbean and the Pacific regions (ACP countries), and an unspecified amount for a further 7 years thereafter.

Oxfam wants the EC to give ACPs at least €500m a year from 2005 and also to give adequate adjustment assistance to all Least Developed Countries (LDC) sugar-producing countries likely to be affected by EU sugar reform.

Contact Information

For further information, please contact:
Louis Bélanger, Oxfam Press Officer, Brussels: 32 2 502 0391 or 32 473 562 260
Oxfam’s proposals for EU sugar reform recommendations are:
Shallower price cuts and a longer implementation period than those proposed by the Commission. Accelerating and expanding market access for LDCs at remunerative prices. Quota cuts of 5.2m tones to end all exports. A clear timetable for the complete elimination of EU sugar export subsidies. Assisting LDCs to develop their supply capacity and improve their competitiveness through the provision of targeted aid and technical assistance. Providing an effective package of measures, including compensation, to help ACP suppliers adjust to EU sugar reforms.