Politicians must do their duty for sugar growers
- December 2004
This Opinion was featured in the December 2004 issue of the the Anglia Farmer
The region's sugar growers need a leader like Nelson on their side, writes David Walker.
It was 199 years ago this October that the European sugar beet industry, generally, and the French portion of it, in particular, got a kick start from Nelson's victory over the combined French and Spanish fleets at Trafalgar.
At the time Carribean cane sugar had largely replaced honey as the standard sweetener in Europe. But it seems sugar from beet was very rapidly developed on the continent to offset the impact of any British naval blockade. And until relatively recently the strategic importance of at least some domestic sugar production was recognized by politicians as worth the extra cost.
It is now the European sugar beet industry which is under siege, both from without and from within. The era when naval blockades were a realistic threat have long since past. So, in the absence of any environmental or health issues to support its continuance, the process of dismantling the sugar beet industry might appear to have started. The worst case scenario is that it will end up on the same slag and scrap heaps as Europe’s coal and steel industries.
But this is unlikely. That the sugar beet industry has so long survived the scythes of EU and WTO reform, is no matter of chance. The US, perhaps the greatest advocate of free trade, also has a well protected sugar industry and so sugar has not been a prime target for reform.
Surely, Australia, Brazil and Thailand, recognized as the lowest cost producers with the most to gain from unrestricted trade, won a WTO ruling against the EU on it subsidized exports. But rather than accept the situation and use it to support reform of the sugar regime, the EU has chosen to challenge it. Likewise it is proposing to close a loop hole in its sugar policy arising from concessions recently made to the West Balkans. It would seem the sugar regime is not going to be abandoned in a hurry.
But the civil servants of the European Commission in July recommended to the politicians of the European Council and Parliament, amongst other things, a 37 percent cut in the effective price, a 16 percent cut in production quotas, and direct payments to farmers "who produced sugar beet under quota" to cover 60 percent of their estimated loss in revenue. While this may not be materially different from what cereal growers have suffered over the years, the delay in implementation has made the prospect that much more painful to contemplate.
The proposed reforms may seem to make good economic sense. But the two major beneficiaries of the sugar regime are France and Germany, and it is politics which will shape the final decision. This must surely have been anticipated by the civil servants of the Commission and very probably there is contingency in their recommendations in terms of what will be negotiated out.
The 200th and no doubt several more anniversaries of the Battle of Trafalgar will surely pass before the future of Europe’s sugar beet industry is decided. The outcome may still be in doubt, but, as was the case whenever Nelson engaged, a good scrap seems guaranteed. It is worrying, however, that we do not have anyone like Nelson on our side.
December 2004
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