July 15, 2004

Outcry Greets Europe's Plan to Overhaul Beet Subsidies

BRUSSELS, July 14 - The European Commission's plan to overhaul the European Union's heavily protected sugar market met stiff and immediate opposition when it was introduced on Wednesday.

Europe's sugar producers expressed serious concerns that the move might lead to a collapse in sugar prices in the union, the Committee of European Sugar Manufacturers said in a statement. About 100 sugar beet growers descended on the commission's offices here.

The proposals aim to lower the price of sugar by about a third and reduce the quantities of sugar produced so that the excess is not dumped on overseas markets.

The current plan, unchanged for more than 30 years, encourages Europe's 60,000 sugar beet farmers to maximize production by offering generous subsidies for exporting their sugar outside of the union.

"Intensive sugar beet growing is causing environmental problems and subsidized exports are being roundly criticized throughout the world, above all by the developing countries," Franz Fischler, the European agriculture commissioner, said after his proposal for changing the system was approved by commissioners at their weekly meeting.

The measure is now subject to approval by the governments of the union's 25 member nations, with the aim to have it in place by July 2005.

Environmental advocates and lobbyists on behalf of developing countries said the commission's proposal fell short. "The European Commission's sugar reform proposals will not reduce poverty or achieve higher environmental standards," said Oxfam International and the World Wildlife Fund in a joint statement.

Elizabeth Guttenstein, head of the World Wildlife Fund's agriculture program, said, "After decades of waiting for reform, this is a half-hearted effort."

The director of Oxfam's Brussels office, Jo Leadbeater, said, "This plan will not end export dumping and will not solve the problem as we see it." She added that in her view the commission was pandering to large-scale European farmers and sugar processing companies.

The sugar industry in Germany, one of the largest and most productive in the union, added to the criticism. "Proposals made known so far put the future of the entire European beet and sugar production in question," Hans-Jörg Gebhard, chairman of the German trade group Wirtschaftliche Vereinigung Zucker, told Reuters.

The commission was anticipating the outcry, though some people close to Mr. Fischler said they were surprised by the strong reaction from Germany.

"Under the new regime,'' said one of these people, insisting on anonymity, "countries within the union will be able to trade their quotas of sugar with one another. This will inevitably result in production gravitating to places like Germany and France, from fringe producing countries such as Spain and Finland."