Sugar price change proposal could hit Guyana hard
-- President stresses
Guyana Chronicle
July 3, 2004
GUYANA stands to lose US$35M annually from the sale of sugar if a proposal by the European Union (EU) to reduce its sugar price to African, Caribbean and Pacific (ACP) producers by 20% by 2005 and 33% by 2007 becomes a reality.
This was outlined by President Bharrat Jagdeo yesterday at a press briefing prior to his departure for Grenada to attend the CARICOM Heads of Government meeting opening there tomorrow.
Emphasising the importance of the sugar industry to the local economy, he noted that sugar production accounts for 16% of the Gross Domestic Product (GDP) and about 20% of foreign exchange earnings, while it creates direct employment for some 18,000 people and indirect employment for another 10,000-15,000.
Consequently, sugar is going to be a major item at the Grenada meeting, the President stressed.
He indicated that as the Head of Government in CARICOM (Caribbean Community) with the responsibility for agriculture, he will be delivering a paper on a new framework for repositioning the region’s agriculture sector.
Agriculture was not getting the attention it deserves and needs to be returned to the “front burner”, he said.
President Jagdeo said the indication given by the EU in its recent proposal, was “more than an issue of sugar”, stressing that it was also an issue of “trust and bad faith” which undermines the guarantees contained in the Cotonou agreement between the ACP and EU.
He explained that the EU had given the assurance that the present sugar regime under which Guyana and other ACP producers get guaranteed prices for sugar, would have remained in place until 2007.
He said it was disturbing that in the face of negotiations for a new economic partnership with the EU, a “new surprise was sprung” which “shocked me.”
Responding to the EU’s proposed compensation for the reduction in prices through the European Development Fund (EDF), the President was critical of the slow manner in which aid is provided, pointing out that it takes 90 days for invoices to be processed in Brussels.
Supporting his contention with respect to the EDF, the President cited Guyana’s experience with the Linden Economic Advancement Programme (LEAP).
He pointed out that funds from the national treasury had to be diverted to the Linden programme because of the slow pace of accessing funding from the EDF.
The Sugar Association of the Caribbean (SAC) has also vehemently condemned the proposed reform of the EU sugar regime as announced by the Agriculture Commissioner of the EU, Mr. Franz Fischler for consideration by the EU Commission.
In a terse statement condemning the new proposals the SAC declared: “SAC which along with other ACP sugar industries, is one of the major stakeholders in the EU sugar regime, protests in the strongest terms the unfairness and illogicality of the proposed regime change. The proposals ignore points made by the developing ACP sugar exporting countries and in particular, ignore the sanctity of the benefits of the Sugar Protocol as set out in the Cotonou Agreement.”
It further stated: “Perhaps the most unacceptable new element is the proposal to introduce a 20% price reduction in 2005, reaching 33% in 2007. This cuts across the reassuring guarantees given by EU Commissioners that any changes would be gradual and designed to avoid severe disruption to ACP economies.”
The SAC also submitted that the proposals are blind to the terrible consequences of what was done to the banana industry in the Caribbean when reform proposals for the industry were adopted by the EU.
“The EU Commissioner actually suggests, without shame, introducing specific programmes similar to those introduced for bananas to help ACP countries with sugar industries adapt to new market conditions.”
According to the SAC, the proposals contradict the EU’s continually reiterated commitment that international trading arrangements should reflect the needs of development and provide special and differential treatment for small and vulnerable economies. (CHAMANLALL NAIPAUL)