Caribbean sugar producers find common ground to face EU proposals
The Finance and Investment Column
Business October 1, 2004
Stabroek News
October 1, 2004
Although Caribbean sugar producers each face different situations within their own industries, they have planned to present a united position at a workshop with other African Caribbean Pacific countries and European Union officials in Brussels next week. And that is that any review of the EU's external sugar regime should not come until 2008.
The main objective of the two-day meeting held in Georgetown was to find that common ground ahead of what is expected eventually, to be tough talks over sugar that will directly affect the livelihoods of thousands of Caribbean workers.
According to one participant, the six countries still producing sugar in the Caribbean all face different challenges to handle the proposed changes to the EU market which has sustained their industries since the 1950s. Marginal producers such as St Kitts are most likely to succumb if the 37% cut in the price the EU pays to ACP countries goes through, given that they rely totally on that market.
A report by a UK consultancy LDC International has concluded that Belize and Guyana could survive, Jamaica possibly, but the rest would be in trouble including Barbados and Trinidad. Barbados plans to move into growing cane for fuel while Trinidad is hoping to rely more on private farmers. It has been privately suggested that some of these plans are wishful thinking.
But the message for the EU would be that the Caribbean is in it for the long term and one of the topics discussed was the controversial idea of regionalising the Sugar Protocol quota. This would mean that if Barbados were to go out of production, Guyana or another Caribbean country could take their share. As it stands the quota is spread among all the other producers in the ACP. It is also the case that African producers including Zambia, Sudan and Mozambique all want to develop their EU markets.
The delegates talked "around compensation" but the sentiment was that it was premature at this time. It was also noted that in the case of rice and bananas the compensation being offered by Europe had been a pittance compared to the economic losses and that it had come far too late. In the case of bananas the compensation was only coming through now following trade changes in 2001. One observer noted it was as if the EU was paying for the burial of the industry.
Also discussed was the compensation to EU beet farmers, based on their areas of production. It was noted that a strong argument could be given that Caribbean producers were intrinsically linked to the regime and that they should receive equal compensation. The feeling also was that the EU is hiding behind the WTO ruling favouring Brazil, Australia and Thailand deeming the regime as violating trade rules, in order to dismantle the Sugar Protocol prematurely when it was really not necessary since they only have to reduce their subsided exports to comply.
One view is that EU Trade Commissioner Pascal Lamy's gesture to Least Developed Countries (LDC) under the Everything But Arms (EBA)agreement to provide duty and quota free access to all exports, was later seen as rather reckless as those countries could then send any amount of sugar to Europe. There is therefore a suggestion that the price cut proposals are a way of sending a signal to those countries that they should not bank on Europe to be a lucrative market and should desist from investing in large-scale production.
What is seen as most unfair is that the Caribbean has become the odd-man out and is being punished in order to help the LDCs when the EU farmers, who have many other crops they could grow, are to be protected.
Would the Caribbean have to wait until they were least developed so they could qualify for free access? The historical picture is that the Caribbean would not have been established were it not for Europe's insatiable demand for it over the last 400 years. Most recently the sugar agreements were actually put in place after World War II to ensure the United Kingdom had enough sugar and were not intended to prop up the Caribbean. Now the tables are turned the ingratitude of the UK which is a key promoter of reforms is plain to see, says one participant. As such the delegates at the meeting suggested en-couraging Jamaicans and Guyanese living in England to speak out at the potential destruction the price cuts could engender. Oxfam, which has been a strong opponent of agricultural subsidies, also needs to be persuaded of the Caribbean's plight.