Beckett welcomes sugar reform deal

Friday, 25 November 2005 12:00 AM

Environment minister Margaret Beckett has welcomed a "groundbreaking" deal to cut European sugar subsidies.

Following lengthy negotiations, EU agricultural ministers yesterday agreed to cut the prices offered to European sugar producers by 36 per cent over four years.

Ms Beckett, who chaired the talks in Brussels this week, said she was delighted that a deal has finally been agreed, saying: "This is an historic deal - the sugar sector has remained largely unreformed for nearly 40 years."

The move follows years of pressure from the World Trade Organisation (WTO) in particular to remove sugar and other agricultural subsidies for EU farmers. Critics claim they discriminate against sugar producers in the developing world.

"Achieving reform was one of the key objectives for the UK's presidency as we set out last July. The overwhelming majority of member states backed our compromise proposal for a 36 per cent price cut over four years," Ms Beckett said.

She added: "I recognise that reaching agreement has not been easy for many member states, including the UK, but I firmly believe this groundbreaking decision will secure a sustainable future for the EU sugar sector."

The government believes that the agreement will strengthen the EU's bargaining hand at the upcoming WTO meeting in Hong Kong next month, particularly if it has failed to reach a decision on reforming other agricultural subsidies by then.

However, yesterday's deal stopped short of full liberalisation, with a number of compensation measures introduced to cushion the blow for European farmers.

Producers who wish to abandon growing sugar as a result of the subsidy cuts will be offered compensation of up to two-thirds of lost revenues, while imports from least-developed countries could be restricted if they increase by more than 25 per cent each year.

The move has been welcomed by one the world's largest sugar producers, Tate and Lyle, which believes that the deal strikes a sensible compromise between opening the market up to competition and providing some protection for European producers.

"Whilst the long-term impact on Tate & Lyle remains significant, the final decision to make the cut in the sugar reference price of 36 per cent (instead of the 39 per cent previously proposed) and to delay the implementation of the price reduction (until 2009) is very welcome," it said in a statement.

However, the deal was condemned by Luis Morago, head of Oxfam International, who warned: "Developing countries have been sacrificed in order for Europe to reach a deal.

"The [European] commission has hurled money at its member states to convince them to sign up but has abandoned some of the world's poorest countries to destitution.

"In a year that was meant to focus on Africa and just days before the WTO ministerial in Hong Kong, this is a particularly bitter blow."

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