EU settles on sugar price cuts

EU agriculture ministers have reached agreement on controversial reforms of the sugar regime. 

The ministers, meeting on 24 November 2005, agreed that EU prices, kept high by a 40 year-old price guarantee agreement, should be cut by 36% over the next 4 years from the 39% originally proposed. 

The reform, hailed by Agriculture Commissioner Mariann Fischer Boel as a ‘brave and bold decision’ will give the EU a substantial advantage when pressing for subsidy cuts and market opening from other countries in the forthcoming WTO talks in Hong Kong in December.

The African, Caribbean and Pacific countries have expressed outrage at the agreement, which is only a 3% smaller cut than the 39% originally proposed. The ACP countries have been significant beneficiaries of the EU system up until now.

They had been pressing for a cut in prices of only 19%, failing which they claimed they stood to lose €300 million a year in direct export earnings and the destruction of their sugar industry. The EU, however, has promised financial assistance to ACP countries to help cope with the changes.