EU decision endangers sugar production in Finland

Danish owner of Säkylä sugar plant to report intentions today

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Finland has failed in its efforts to persuade the European Union not to radically slash Finnish sugar production quotas.
     The EU ministers of agriculture decided at their meeting in Brussels on Wednesday to enact further cuts in sugar production in the EU. Finland voted against the measure, which could lead to the end of sugar production in this country.
     "Disappointed and sad", is how Finland's Minister of Agriculture and Forestry, Sirkka-Liisa Anttila (Centre) described her feelings after the vote.
     She also found some fault in Finland's lobbying tactics.
     "In the future we need to find more partners for cooperation", Anttila said in Brussels.
     
Only three other countries voted with Finland: Denmark, Slovakia, and the Czech Republic They were not strictly allied with Finland on the issue: each of them had their own separate motives.
     
Under the decision, farmers and the sugar industry are to be encouraged to give up production voluntarily.
      Finland would have wanted to let each member state decide on quotas on their own.
     In the background there is a fear that reductions in the sugar beet farming will lead to the closure of Finland's last remaining sugar factory in Säkylä. Previous reductions a couple of years ago forced the closure of the Salo factory.
     
Finland worked hard to persuade the other EU countries to allow it to maintain more sugar production, noting that the changes of 2005 led to a 38 per cent reduction in the country's sugar quota.
     Many other member states have not cut back on their sugar production as sharply. According to Anttila, it goes against the sense of justice of the Finns, who have already taken measures to curb excess production, to be punished as harshly as those who have been more lax.
      Pekka Myllymäki, chairman of the sugar beet committee of the Central Union of Agricultural Producers and Forest Owners (MTK) was disappointed. "Finland should know how to anticipate that the other countries bluff", he said in Brussels.
     
Anttila promised to raise the national agricultural subsidies for sugar beet to the highest level permissible - EUR 350 per hectare.
     The European Commission has also promised that in the distribution of compensation for giving up production, priority could be given to farmers whose sugar beets grow the furthest from the Säkylä factory.
     However, Myllymäki did not feel that prioritising farms according to distance was necessarily fair for all farmers.
     
Much depends the owners of the Säkylä sugar factory, who must decide whether or not to continue the operations of the facility. The Danish company Danisco owns 80 per cent of the plant, and the rest belongs to the Finnish Lännen Tehtaat.
     Danisco Deputy CEO Mogens Granborg says that no decisions have been made on the fate of the Säkylä factory.
     Granborg said that an announcement would come on Thursday, once the company has studied the EU decision.
     The EU sugar decision takes effect in October, after which farmers will be entitled to apply for compensation for giving up sugar beet farming. The compensation is EUR 237.5 per tonne of sugar within the quota.
     There is also structural support of EUR 625 per tonne, with 90 per cent going to the industry and the rest to farmers and contractors.


Previously in HS International Edition:
  Finnish sugar production gets no support from European Union (26.9.2007)
  Danisco to close down its sugar factory in Salo (10.2.2006)
  EU allows Finland to pay special compensation for sugar farmers (25.11.2005)
  Sugar beet growers concerned at EU plans for production and producer prices (23.6.2005)

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