Sugar Deal in the Bag | Business| Economy and finance news from a German perspective | DW | 25.11.2005
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Sugar Deal in the Bag

European Union farm ministers have agreed to a sweeping reform of the sugar sector following a marathon three-day session of talks.


Sweet deal for consumers

A British spokeswoman said a deal had been reached after "a large qualified majority" of the ministers had agreed to the proposed reform brokered by the European Commission and Britain, the current holder of the rotating EU presidency.

The EU had little choice other than make broad reforms to its sugar policy after complaints from Australia, Brazil and Thailand led the World Trade Organization (WTO) to rule it illegal.


Sugar beet

At the moment, the EU offers a guaranteed price for sugar that is paid for, in effect, by consumers, with Brussels buying from producers at about three times the average world market price. Sugar producers outside Europe argue that such a system distorts the price of sugar on international markets.

Farmer protests

The spokeswoman said the reform package was approved after the proposed cut in the guaranteed price was reduced to 36 percent rather than 39 percent as suggested in a previous set of proposals.

The ministers were under pressure to endorse the deal because the reform will give the EU extra bargaining power during crunch trade negotiations ahead of a mid-December Hong Kong ministerial meeting of the WTO.

Feld mit Zuckerrüben

The stuff of heated debate

But Europe's sugar beet farmers reject the planned reforms, as do 18 African, Caribbean and Pacific states, known collectively as ACP countries, which benefit from the current guaranteed price system. They argue that the reform will make it even harder for them to adapt than for richer EU producers.

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