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ACP urges EU to make less drastic cuts in sugar prices
BRUSSELS (AFP) Nov 11, 2005
African, Caribbean and Pacific (ACP) sugar producers urged the European Union on Friday to abandon plans drastically to cut the guaranteed price of sugar to avert economic and human suffering.

The group called on the European Commission to cut the net price by 19.0 percent spread over eight years from 2008, rather than by 39.0 percent over two years from 2007 as it is proposing to do under its current reform plans.

"We are aware of the pressures for some degree of price cut. However, we cannot accept a reduction that is unjustifiably excessive and hits the most vulnerable stakeholders the hardest." ACP chairman George Bullen said.

"A net reduction of 19 percent over eight years with the retention of refining aid would be fully in line with the EU's WTO commitments, despite what the commission may claim to the contrary," he said in a statement.

"From our perspective, while far from ideal, it would allow more ACP producers to remain competitive and offset the economic and human suffering that will inevitably be caused by the drastic reform," he said.

The EU was forced to reform its nearly 40-year-old existing sugar policy, after it was declared illegal by the WTO (World Trade Organisation) following a complaint from Australia, Brazil and Thailand.

A WTO arbitrator has given the EU until May 22 next year to limit subsidies on sugar and fall into line with the organisation's ruling.

The reform will be among the top items on the agenda of a meeting of EU farm ministers starting on November 22 and which is likely to turn into a marathon.

Farm commissioner Mariann Fischer Boel is desperate to obtain agreement among the ministers before the WTO's meeting in Hong Kong next month.

But the ACP producers fired a shot across the commission's bows on Friday.

"If we continue to feel that our concerns are being ignored, we can anticipate strong repercussions for the Hong Kong WTO ministerial conference and beyond. The EU cannot expect to progress at Hong Kong at the expense of the ACP." Bullen said.

Under current rules, the EU offers a guaranteed price for sugar that is paid for, in effect, by consumers, with Brussels buying from producers at about three times the average world market price.

The European Commission's plans to cut the guaranteed price includes a voluntary compensation scheme for producers forced out of business by the move.

Although the EU reform includes a plan to earmark 40 million euros to help ACP sugar producers, many in the bloc believe the envisaged amount is far too small and have balked at conditions attached to the aid.

The reform is expected to hit ACP countries hard, with estimates suggesting that the 18 member nations, which annually export 1.3 million tonnes of sugar to the EU, will lose about 400 million euros (480 million dollars) a year.

On Thursday, the Least Developed Countries group, Oxfam and the WWF environmental organisation joined forces with the ACP to condemn the EU plans.

"The EU's sugar regime reform proposals look set to sell out the interests of the worlds poorest people and represent a missed opportunity for the EU to show its commitment to the WTO process," they said in a statement.

They said "would lavish an eye-watering total of 17 billion euros of EU taxpayers' money on sugar beet farmers and processors", and that refiners too would be protected by unfair restrictions on imported raw sugar.

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