Sugar Industry

Trade Distorting EU Sugar Regime Changes Destroy Both the Value and Demand for SADC Sugar

In written evidence recently submitted to a UK Parliamentary Committee alarm was raised about the recent reform of the EU sugar regime by ACP Sugar/LDC Sugar Industries Group, an organisation representing 20 sugar industries in African, Caribbean and Pacific (ACP) and Least Developed Countries (LDC) including South Africa and other SADC countries.

Late last year the EU removed domestic quotas and thus any restrictions on the amount of domestically produced sugar that can be sold in the EU. Additionally, according to a report by EPA Monitoring Recent changes to EU sugar subsidies through “Voluntary Coupled Support” (VCS) pay Europe’s farmers to grow sugar beets, seriously impacting the trade in sugar that is the backbone of national economies in Africa and elsewhere. Given that there now are no restrictions on how much tonnage can be marketed internally in the EU, the available market for developing country sugar industries in the EU has been reduced and prices in the EU are now below the equivalent price on the world market.

ACP/LDC Sugar is highly critical of the over production and consequent trade distorting effects of  VCS in the EU sugar sector. It was pointed out that estimates suggest that within EU27 countries “VCS supports production of 3.6 million tonnes of sugar production that, by definition, would have otherwise been unsustainable’”. Further “VCS in the sugar sector is a genuinely unfair practice” which is “unfair to developing countries, UK beet farmers and UK processors of beet and cane

Based on the findings of a recent UK government white paper on future UK trade policy that some “reasonable trade protection intervention can be warranted to address genuinely unfair practices” the ACP/LDC Sugar Industries Group argues that sugar trade protection is warranted

Without reasonable trade protection the UK refining sector and the ACP/LDC suppliers of bulk raw sugar would find it difficult to compete with the surpluses created in the EU.