WASHINGTON, August 5, 2015 – An analysis focused on sugar in the European Union’s agricultural policy reforms finds that while it is phasing out sugar beet price supports and marketing quotas, it is ushering in various payments that will sum to $667 million a year to both sugar beet and cane growers by 2019. The findings, released at the American Sugar Alliance conference in New Mexico this week, were quickly met with a sharp response from a European sugar industry representative, who calls them “intellectually dishonest.”
The report, by Patrick Chatenay, an international sugar industry analyst, outlines how the EU phased out its robust sugar price supports after 2006, vastly shrinking its industry, closing over half of its refineries, killing 120,000 jobs and ending beet production on 150,000 European farms. The EU has also dropped quota limits on sugar imports and, while maintaining stiff duties on imports from affluent countries, has zeroed out its tariff on sugar from a host of African, Caribbean, Pacific and other developing nations.
But that does not mark an end to support for growers. Starting in 2019, he projects, EU sugar beet farmers will receive about $300 million in payments not tied to beets, and 10 EU nations will continue additional direct beet support payments to the tune of $200 million a year. Also, small cane growers in the island nations of French West Indies, La Réunion and the Azores will get about $160 million annually in income support.
The findings, which project that such payments will foster increased European sugar production, prompted Jack Roney, chief economist for ASA, to conclude, “Europe may be making reforms, but significant subsidies will remain and the EU will continue to distort the global market.”
But Marie Christine Ribera, director general of the European Association of Sugar Producers, calls that conclusion “an incorrect accusation.”
When the U.S. and EU treatments for sugar are compared, she says, “the conclusion is: we all subsidize.” But she said, while the U.S. still supports producers’ domestic sugar prices and tightly controls imports, the EU no longer implements its “reference” support price, it has opened its market to about 600,000 more metric tons a year in permitted imports since 2009, and its new sugar program is designed for stable, not increased, production.
“The study should recognize,” Ribera said, “the reforms we’ve been making.” The EU “will be one of the least regulated and stable sugar markets in the world,” and it fully complies with WTO rules, she declared.
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