Commission dismisses criticism of EU sugar policy made in a post-Brexit study

A 'sugar mountain' stored in the warehouse at a sugar mill and ethanol manufacturing plant. [SHUTTERSTOCK]

A UK study setting recommendations for the country’s post-Brexit trade and agriculture has challenged the EU’s sugar policy of the last decade, saying it stimulated sugar over-production. The Commission stood up for its 2006-2017 sugar quota system and dismissed the claim as unfounded.

A report drawn up by the Centre for Food Policy of the University of Warwick suggested that the UK should seize the opportunity to leave the EU and reformulate its own agriculture and trade policies, reducing sugar consumption by at least two thirds.

The report published in February also said that “EU agricultural and trade policies have become increasingly orientated to the demands of food and drink manufacturers, ensuring them wider access to cheaper sources of sugar and sweetener.”

Therefore, the study continues, there are few incentives from the supply-side for food and drink companies not to use sugar to sweeten, bulk, colour and preserve their products.

EURACTIV.com spoke to one of the two authors of the paper, Professor Jack Winkler, Emeritus Professor of Nutrition Policy at the London Metropolitan University.

“For many years, the EU sugar regime stimulated the over-production of sugar in Europe, hence the notorious ‘sugar mountains’. Then, to get rid of the surplus, it offered refiners export rebates,” he said.

This scheme of export refunds was ended in 2006 after a formal complaint to the WTO made in 2005 by a coalition of major sugar exporters led by Brazil and Australia, and finally dismantled in 2017.

The authors of the paper proposed to restore production quotas and minimum prices, but with the new purpose of supporting the sugar reduction agenda.

“Instead of using these two instruments to increase the production of sugar, we are proposing a pragmatic way to use them as a way of adapting agriculture to public health needs, growing what people need to eat, putting nutrition into agricultural policy,” Winkler said.

Tackling obesity: The difficult task of finding the right policies

Obesity affects at least one in six adults and one in eight children aged 7-8 across EU countries, putting pressure on policymakers to fight the crisis and nudge behavioural changes in citizens’ lifestyles.

No over-production

But according to the Commission, the EU production quota system never led to a sugar glut.

The system, under which sugar production was limited, was in place from 2006 until 30 September 2017, and was quite contrary to stimulating the so-called over-production, a European Commission source told EURACTIV.com.

Production could be allowed under specific circumstances and could be exported at world prices, at the time generally lower than EU prices, within a WTO limit of 1.35 million tonnes, the EU source added.

No export refunds have been paid to the sugar sector since 2007, the Commission source continued, and the sugar reform of 2006 also contained a substantial reduction of the sugar quotas of around 6 million tonnes.

EU sugar companies struggle to survive as prices plunge post-quotas

European Union sugar companies have emerged from the cocoon of production quotas and are now fighting to survive in a fiercely competitive world market with prices and profits plunging.

Furthermore, the EU was globally at the forefront of efforts to stop export subsidies, the EU source concluded. Together with Brasil, the bloc advocated for a limit on trade-distorting farm subsidies and agricultural domestic support in general at the 11th WTO Ministerial Conference in Buenos Aires in December 2017.

“The EU sugar quota system limited EU beet sugar production for food use to around 85% of the EU’s needs, turning the EU into a net importer dependent on sugar from third countries,” said Marie-Christine Ribera, director general at the European sugar producers association (CEFS).

According to her, over the past decade, the EU has also increased third country access to the EU’s sugar market as part of its bilateral trade strategy, putting more pressure on EU prices, since this sugar is often produced more cheaply, under less stringent social and environmental conditions and, in some cases, with government support.

European beet producers’ growing concerns over sugar prices

The end of sugar quotas coincides with the collapse of prices on the world market. This is currently more of a problem  for sugar refiners than sugar beet growers, who are still protected by contracts. EURACTIV.fr reports

After the end of the quota system, the EU sugar policy is now market-oriented and the Commission also assists producers to adapt to market forces through the sugar market observatory providing up-to-date market information.

Nutrition and agriculture

According to Prof. Winkler, the focus of nutrition policy everywhere, not just in the UK or EU, has been on nutrition education programmes directed at final consumers.

“This strategy has failed and it coincides exactly with the growth of the global obesity epidemic,” he said, adding that it is high time to start consciously trying to integrate nutrition into agricultural policy.

“We need to supplement actions directed at consumers with actions directed at producers. Farmers have an important role to play in making the world a healthier place,” Winkler concluded.

His study suggests, for instance, that the minimum prices for refined sugar and/or sugar beet should be raised to reduce the availability of cheap sugar, targeting food and drink industry rather than farmers or consumers.

“There is no evidence to link sugar supply and consumption,” said CEFS’s Ribera, adding that within the EU, sugar consumption has trended downwards over the past 5 years, even as sugar prices have fallen to historic lows.

She also said that only very substantial increases in sugar prices will be passed on to the consumer in the form of higher prices for processed products and, even then, it is unclear whether such price increases would affect the consumption of such processed products.

The Commission focused its efforts to address obesity, particularly on product reformulation through the Added Sugars Annex adopted by the national experts in the High-Level Group on Nutrition and Physical Activity.

The Annex called for a 10% reduction of added sugars in processed foods by 2020 and Unesda, representing the European soft drinks industry, but also multinationals such as Nestlé and Danone, have committed to this.

Promoting healthy lifestyles – which interventions are most effective?

EURACTIV analyses the existing challenges policymakers face when it comes to healthy lifestyles in the EU, as well as the several initiatives that have been taken ranging from food reformulation to action at school level.

[Edited by Zoran Radosavljevic]

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