The Week in Europe
  By David Jessop
  The fight for sugar is over. From 2009 on, the Caribbean will experience a 36 per cent cut in price making much of the industry unviable. A short period of adjustment has been won but the case for sufficient resources to ease the pain of transition still has to be made.
   
  In Brussels and other European capitals, officials who will never have to experience the consequence of social and economic dislocation can go home safe in the knowledge the farmers of sugar beet will for the most part be able to make a secure transition buoyed by the prospect of payments amounting to 64.2 per cent of their present income through direct access to a Euro7.5 billion restructuring fund.


  Not so the rural communities of Guyana, Jamaica or Belize. They now face the prospect of an uncertain adjustment in countries where there is no social security net or compensation and so far only the promise in 2006 of Euro 40m for all eighteen ACP sugar producing nations.
   
  The final agreement was reached after days and nights of debate between European agriculture ministers. Germany, the UK, Sweden, Denmark, the Czech Republic and France - which had achieved a Euro 130m per annum additional arrangement for its overseas departments - all fully supported the proposal. Other EU nations including those such as Spain that had professed solidarity with the ACP acquiesced as the European Commission and the British presidency offered first a compromise and then struck deals in overnight trilateral meetings. In the end, only Poland and Greece dissented with the former wanting a ten-year transition period and the latter a further downward adjustment in price.
   
  The result was that when the British Agriculture Minister, Margaret Beckett took a ‘tour de table’ early in the afternoon of November 24 she was able to say that there was agreement. Then oddly and with some passing dissatisfaction, the debate ended, not with a formal vote but an agreement that a qualified majority was achievable in early 2006 after the European Parliament issues in January a non-binding opinion on the reform proposals.

In the end what was agreed was hardly a surprise and had been in the offing for at least the last three months. The overall price cuts will be 36 per cent over four years beginning in 2006/07, instead of a 39 per cent cut over three years as originally proposed. Under the arrangement, the present reference price for sugar of Euro 631.9 per tonne will remain unchanged in 2006/7 and 2007/8 but will fall by 17.1 per cent in 2008/9 to Euro 524 per tonne. In 2009/10 it will fall again but to Euro 404.4 per tonne to bring about an overall price reduction of 36 per cent.
   
  More generally, the new EU regime and the sugar quota system will extend to 2014/15 and European farmers and refiners will be provided with a range of support structures to compensate for loss of earnings and to encourage restructuring and the closure of factories.
   
  During the final debate in the Agriculture Council there was no serious discussion about the consequences for the eighteen ACP sugar protocol nations. Instead the European Commission limited itself to making two brief statements after the decision.
   
  Europe, it said, will remain an attractive market place for developing countries to sell their sugar. An assistance scheme for traditional African, Caribbean and Pacific suppliers has been proposed will ‘initially (be) worth 40 million euros for the second half of 2006. Further long-term assistance will be secured for the period 2007-2013, depending on the outcome of the discussions on the Financial Perspectives’ (the European budget).
   
  The EC also announced that Europe will restrict imports from Least Developed Countries (LDCs) – the world’s poorest nations - if they increase by more than 25 per cent per annum. This measure effectively safeguards the EU sugar market from a surge in exports and a price collapse as a result of dramatic growth in production and exports from nations that had previously been offered duty and quota free entry for all products under the ‘Everything But Arms’ package.
   
  As matters now stand the EC is offering the ACP a paltry sum by way of transitional assistance. Because inter-European arguments about the European budget have not been resolved no one can say with any certainty how much will be available. However, usually reliable sources suggest a figure in the region of around Euro 200m per annum for all eighteen sugar protocol nations.
   
  The end of the sugar debate is effectively a watershed in the region’s relationship with Europe. Over the centuries, sugar for evil and for good has linked the region intimately with its former colonisers and created the background for a special relationship with Europe.
   
  When the dust has settled it will be possible to see more clearly the lessons learnt in the fight for sugar but it is already possible to draw some early conclusions.
   
  Throughout, Europe regarded the effect of its reforms on the Caribbean as collateral damage and never consulted about the core issues of price cuts and the transition period. Enlargement has utterly marginalised the Caribbean from European thinking.
   
  For its part ACP states - with some important Caribbean and Indian Ocean exceptions - never gave Europe any clear political reason to cause it to think again. The consultative mechanisms of the ACP lacked the dynamism and ability to address issues in real time, meaning that the rhetoric and action was for the most part minimal, too late and failed to heed what was happening on the ground in Europe. The big European NGO’s largely pursued their own agenda. Brazil, the real long-term winner has stood silent and smiling in the wings. And from a Caribbean perspective the Diaspora was only partially mobilised. European public opinion was not given a reason to care.
   
  Decency stops me describing in print the language used by one very senior Caribbean figure to describe what has happened to the Caribbean over sugar. It is now up to the region and its friends in Europe to ensure that the same does not occur with respect to the transitional support package.
   
  David Jessop is the Director of the Caribbean Council and can be contacted at [log in to unmask]
  November 25tth, 2005
   
   
   



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