EU allows Finland to pay special compensation for sugar farmers
|
|
|
At the negotiations on subsidies for sugar production in the European Union, Finland succeeded in winning approval of a measure that will make it possible to maintain the production of sugar in Finland.
The new measures, which were approved on Thursday, contain a special clause giving Finland permission to pay its own subsidies to its sugar beet farmers of EUR 350 per hectare.
This special subsidy comes in addition to EU compensation to be paid to all member states with sugar production. The EU compensation for lower sugar prices is more than EUR 400 per hectare.
Finland’s Minister of Agriculture and Forestry Juha Korkeaoja sees the decision as a significant victory for Finland. The subsidy is permanent, and Korkeaoja feels that the special treatment granted Finland is a recognition of Finland’s special climate conditions.
Korkeaoja attributes Finland’s success to its wise tactic of expressing willingness to negotiate. He says that a stubborn attitude would have led to failure, which is what happened to Poland, for instance.
Under the new marketing system negotiated by EU agriculture ministers in Brussels, one of Finland’s two functioning sugar factories, located in Salo and Säkylä, will have to close down.
Finland will be allowed to raise the annual output quota of the remaining factory by 25 percent to 90 million kg, which should be sufficient for the profitable operation of the plant.
The final decision on the factory issue is with the Danish owner Danisco.
The aim of the EU reform is to reduce sugar production by 60 million kg - about a third.
Market mechanisms are to be used to reach this goal; sugar prices are to be brought down by 36 percent by 2009. In the first Commission proposal the target was 39 percent.
To make sure that production actually goes down, special incentives are on offer to farmers who give up sugar beet cultivation. These involve both EU and national payments.
Sugar factories that close will be entitled to compensation from the EU Structural Fund.
At the Finnish Union of Agricultural Producers and forest owners, Pekka Myllymäki, the chairman of the organisation’s sugar beet council, was not as satisfied as Korkeaoja. "This was a defensive victory, but not the best possible", Myllymäki said.
Finland has about 2,500 farms that grow sugar beets. Although cultivation will continue in Finland, Myllymäki says that it is incredible that Finland will have to subsidise production with its own national support. He feels that the EU should have paid the extra compensation.
In Brussels, Margeret Beckett, Minister of Agriculture of EU Presidency-holder Britain, and European Commissioner for Agriculture Mariann Fischer did not hide their satisfaction over what they saw as an historic agreement.
"I don’t wonder any more why there have been no changes in sugar for nearly 40 years", the Commissioner joked at a press conference after more than two days of talks.
The result is also expected to ease negotiations at the World Trade Organisation, which are scheduled to be held in Hong Kong in December.
Helsingin Sanomat
|
| 25.11.2005 - TODAY |
 EU allows Finland to pay special compensation for sugar farmers
|
|
