Changing the EU sugar regime gets sticky

BRUSSELS, Belgium, July 20, 2004: Meeting in Brussels on July 19, European Union’s agricultural ministers came to an easy agreement, the sugar regime set up in 1968 and practically unchanged since, needed to be reformed. No other point brought such agreement, as Agriculture Commissioner Franz Fischler’s proposed reforms were defeated on a varying set of criteria.

Ministers disagreed with Fischler over the levels and the stages proposed for reducing the intervention price for sugar as well as the minimum price of beet. Concerns were also raised about the proposed reform of the quota system and the transfer of quotas between Member States. Several ministers also raised the issue of the compensation level for price cuts. The Fischler proposal introduces a system whereby payments are decoupled from the level of production.

The current system has come under widespread criticism for being over-protective of EU farmers and sugar manufacturers, keeping prices artificially high and dumping EU exports on the world market. These practices have distorted the world price for sugar and left farmers in developing nations suffering with the low prices of a flooded market.

To help sort out lingering questions ministers tagged a special committee of agricultural experts to conduct a thorough examination of the current regime and report back to them at a later date.