Sugar policy shake-up to squeeze cane producing countries

By Caroline SCOTT-THOMAS contact

- Last updated on GMT

Funding to help affected farmers is unlikely to make a difference fast enough, the foundation says
Funding to help affected farmers is unlikely to make a difference fast enough, the foundation says

Related tags: Sugar, European union

The Fairtrade Foundation has urged food companies and retailers to choose Fairtrade sugar, amid concerns that a sugar price slump and CAP reforms could push thousands of workers into poverty.

The non-profit organisation said many African, Caribbean and Pacific countries could be squeezed out of the European sugar market after CAP (Common Agricultural Policy) reform comes into effect in 2017. The reform will lift limits on how much sugar produced in the EU can be sold on local markets.

“In countries such as Belize, Guyana, Fiji, Malawi, Swaziland and Zambia, among others, there are few other options for farmers who have relied on exporting sugar to the EU,”​ said Jon Walker, sugar product manager at the Fairtrade Foundation. “If these farmers are squeezed out of the EU market and not given additional support to boost their productivity or diversify into other crops, as many as 200,000 people could be pushed into poverty.”

The European Union has recognised the potential impacts of CAP reforms for foreign sugar farmers and has put in place a fund for those affected to help them diversify their crops or to become more competitive. However, sugar prices have fallen much sooner than anticipated, after the EU released extra quota sugar onto the market in 2012-13.

Sugar prices have fallen by about 30% in the past year, and Rabobank has forecast​ that prices will fall further in the long term. Meanwhile, European sugar consumption is growing.

“We urge consumers and businesses in the UK to choose Fairtrade sugar​,” said Walker. “… We know that by making this simple choice they can make a significant difference to the lives of farmers and their communities in the developing world.”

However, the Fairtrade Foundation says that less than 1% of global cane sugar is sold on Fairtrade terms.

The European Union currently is the world’s largest importer of sugar, but a European Commission study​ suggests that after 2017, there will be a strong shift away from imports. Sugar imports from high-cost countries are likely to fall by about 43%, it says, while EU beet sugar production will increase by about 4%, and exports will fall by about 15%.

It also predicts income from the EU beet sector to fall by about 17%.

No one from the European Committee of Sugar Manufacturers (CEFS) or the International Confederation of European Beet Growers (CIBE) responded to a request for comment prior to publication. 

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