Plans to slash EU sugar prices will drive hundreds of thousands of farmers in the developing world into poverty and make a mockery of Europe's commitment to millennium development goals, ministers and non-governmental organisations warned yesterday.
The European commission will today announce proposals to cut the support price for white sugar by 39% and minimum beet prices by 42% over two years from 2006 in an effort to get rid of 5.2m tonnes of subsidised exports and close down uncompetitive production, sources said.
In the first reform for 40 years, it is preparing to set aside up to €6bn (£4bn) to fund a "buyout" programme to pay smaller, inefficient farmers a premium to give up their quotas - a move critics say will reinforce monopolist powers of big producers and refiners in northern Europe. More than a dozen EU countries may be forced out of the industry.
Caribbean ministers, backed by NGOs, demanded shallower cuts and a longer implementation period as well as a much bigger support fund for producers in developing countries to help them make their industries more competitive.
KD Knight, Jamaica's minister for foreign affairs, said the proposed price cuts would decimate sugar industries which contributed up to 70% of GDP in developing countries, increase poverty and crime and accelerate the rural-urban drift.
"Any cut in prices should start no earlier than 2008 and should be phased in over 10 years and the ensuing price must be remunerative, enabling us to be more competitive and improve productivity. If it is not, access, including preferential access, means nothing," he said.
Clement Rohee, Guyana's minister of foreign trade and international cooperation, said it was "hypocrisy" for the EU to adhere to millennium goals while presiding over such "collateral damage".
The commission has proposed an initial €40m compensation fund for developing countries from 2006 to help them adapt to the new price regime. But officials said the outcome depended on the overall EU budget.
