Sugar beet growers concerned at EU plans for production and producer prices

Minister claims moves could kill off production in Finland

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The EU Commission unveiled plans on Wednesday for an overhaul of sugar production within the Union. Severe cuts in guaranteed prices for European producers - as much as 39% - are promised, with a likely knock-on effect that production of sugar beet would cease to be viable in several member-states.
      Finland is included in this list, and the proposal prompted immediate and angry responses from agricultural producers, as it did from sugar producers and manufacturers across the Union. A broad front has been emerging in Finland to fight the Commission proposals, from the moment that the first details came out.
     
The Minister for Agriculture and Forestry Juha Korkeaoja (Centre Party) has demanded that the cut in the price of sugar beet should be compensated 100% to growers. The Commission has suggested compensation running at about 60%.
      Meanwhile, Esa Härmälä, the Chairman of the Central Union of Agricultural Producers and Forest Owners (MTK), has urged that Finland can under no circumstances back the Commission plans.
     
According to an EU study, Finland produced slightly under 150,000 tons of sugar from beet during the last growing season, or just 0.7% of the entire EU output. Finland is 70% self-sufficient in sugar, with the remainder imported as cane sugar.
      There are four sugar factories in the country, under Danish ownership.
     
The Commission's proposals call for a reduction in the price per ton of sugar beet from the present EUR 43.00 to EUR 33.00 by 2007, and to EUR 25.00 by the following year.
      Brussels has already shown a willingness to take account of the problems in those countries where the reforms will hit hardest. These are currently estimated to be Greece, Italy, Ireland, and Portugal.
      More than 300,000 European farmers grow sugar beet, with France, Germany, and Poland being the biggest individual producers.
     
The Finnish EU Commissioner Olli Rehn believes that the implementation of the planned overhaul will have to take into consideration the situation in each individual country and attempt to find tailored solutions to regional and social problems that may arise.
      The Agriculture Commissioner Mariann Fischer Boel nevertheless argues that the changes must come quickly, with no lengthy grace periods or transition stage.
      Commission representatives estimated on Wednesday that the proposal could have a chance of being ratified at the next European Council session in November. This would mean the EU has a common front on sugar in negotiations with the World Trade Organisation.
     
The WTO has previously urged the European Union to reform its sugar policy and to stop exporting the commodity onto world markets with the benefit of hefty support grants and subsidies. Australia, Brazil, and Thailand already mounted a successful challenge to the system of subsidies at the WTO.
      It is not merely growers within Europe who are up in arms: poor nations in the Caribbean and Africa have enjoyed preferential access to European markets, and have been able to sell their goods at the higher EU prices.
      EU sugar prices are around four times higher than the global market rate and are safeguarded by high import tariffs. Brussels also pays out export subsidies to get millions of tons of sugar off its internal market each year, helping to keep EU prices high and to support Europe's farmers. Fischer Boel points to the unsustainability of such a regime.
     
A demonstration took place outside the offices of the European Commission in downtown Helsinki on Wednesday.
      Around 50 protesters dressed in white overalls expressed their dismay at the Commission's reform plans. The general belief is that jobs will go, and production will shift to Central Europe, mainly to France.
      Sugar beet production in Finland is as large - in terms of cultivated area - as is production of potatoes or rye. Unlike growers further south, who can switch to olives or grapes for wine, Finnish sugar beet producers have no real alternative except grain crops, and Finland already faces over-production in this area.
      The loss of Finnish-produced sugar would have a further impact on many foodstuffs hitherto sold with the swan-and-flag symbol denoting domestically-produced Finnish goods.


Links:
  MTK, the Central Union of Agricultural Producers and Forest Owners
  EU Commission Press Release
  European Commission Representation in Finland

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