EU ends sugar quota system

Published online: Oct 30, 2013
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SIGATOKA, Fiji-The European Union has announced that the current system of sugar quotas and analogous provisions for African Caribbean Pacific countries, including Fiji, will end on Sept. 30, 2017.

European Commission deputy director general for development co-operation Marcus Cornaro made the comment while speaking at the 13th African Caribbean Pacific Ministerial Conference on Sugar at Shangri-La's Fijian Resort and Spa in Sigatoka on Tuesday.

Despite delivering news that ACP sugar-producing countries did not want to hear, Cornaro assured the ACP - who contributed 60 per cent of sugar imports to the EU-that least developed countries would continue to benefit from generous preferential access to the EU market, duty and quota free.

"The political agreement on the Common Agriculture Policy post-2013 concluded that the current system of sugar quotas and analogous provisions will end on 30 September, 2017 and that will mark the final stage in the reform of the sugar sector, decided in 2005,"Cornaro said.

"I know that this matter was and remains very close to the ACP constituency.

"But I am also convinced that this process will be a win-win for European and ACP sugar producers as quotas stifle, rather than stimulate growth and job creation, including in rural areas."

In his address, Prime Minister and Sugar Minister Commodore Voreqe Bainimarama said the EU decision would have serious impact on ACP countries, including Fiji.

He said it was evident the EU had ignored a request made in 2011 for quotas to be maintained until 2020.

"We risk further unprecedented harm with the abolition of the EU sugar production quotas in 2017," he said.

"As the ACP Group, we had in Mozambique in 2011, made the request in accordance with the Cotonou Partnership Agreement that quotas be maintained until at least 2020.

"This would provide the long-term stability and predictability necessary for continued investment in the sugar cane industries and enough time for any possible and successful restructuring."

Meanwhile, Global trade liberalisation has influenced sugar-producing countries worldwide, according to the chairman of the African Caribbean Pacific Ministerial Committee on Sugar, Satya Veyash Faugoo.

He said trade liberalisation with the world's biggest sugar producers-Brazil and India-had led to a surge in world sugar production and exerted downward pressure on world sugar prices.

"This can force ACP countries out of competition with large-scale producing countries," he said.

"The competitive pressure is further exacerbated by other challenges, including the EU sugar reform, volatile world prices, rising production costs, competition from alternative sweeteners, the impacts of climate change and food security and poverty in the communities that grow sugar cane."

Faugoo said in his capacity as the ACP sugar group chair, he had lobbied with other member states to sensitise the EU to the vulnerability of the ACP sugar producers and the need to maintain EU quotas until 2020.

"We argue strongly that quota abolition would lead to market instability and price volatility resulting in acute risk to ACP sugar producers."

Faugoo said this would undermine guarantees on sugar trade preferences made to the ACP.

Source: www.islandsbusiness.com