25 Nov 2005

EU reaches agreement on reducing subsidies to sugar beet farmers

5:14 pm on 25 November 2005

European Union farm ministers have agreed to a reform package for their sugar sector - a move that will have a significant impact on the industry in Fiji.

The reforms had been forced on the EU by the WTO which had ruled that the heavily subisidised industry was illegal.

The changes include a 36 percent cut in the guaranteed price paid to Europe's sugar beet farmers to be phased in over four years.

This is instead of the original proposal for a 39 percent cut over two years.

The guaranteed price paid to the beet farmers is the same rate that the EU pays to developing countries, such as Fiji, which sell into the European market.

It is often three times the world rate.

The agreement to go ahead with the reforms has outraged Europe's beet farmers, who for the third day running have braved freezing temperatures to stage protests outside the Brussels building where the talks have been taking place.

The eighteen African, Caribbean and Pacific, the developing nations which sell into Europe, have also slammed the reforms, arguing that it will be even tougher for them to adapt than for richer EU producers.