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Wednesday, 21 August, 2002, 23:14 GMT 00:14 UK
Europe's 'bitter pill' for poor sugar farms
EU - harsh on poor sugar producers, says Oxfam

A UK development agency says European Union (EU) consumers and taxpayers are paying to destroy livelihoods in the world's poorest countries.

The agency, Oxfam, says the EU's sugar policy makes profits for Europeans while keeping developing countries poor.

Oxfam wants an immediate 25% cut in EU sugar quota production. It says the poorest countries should be allowed to export their sugar freely to Europe.

In a report on the EU Common Agricultural Policy's (CAP) sugar regime, The Great EU Sugar Scam, Oxfam says no agricultural sector stands in greater need of radical reform.

But the sugar industry has not been included in the European Commission's latest reform proposals.

Trade and poverty

The report is released days before the start in South Africa of the World Summit on Sustainable Development (WSSD), where world leaders will attempt to agree a plan to reduce world poverty.

Oxfam says Europe's subsidised over-production of sugar is having a "devastating impact" on the poor world, ensuring big profits for the EU's large farmers and sugar processors, but "undermining opportunities for people in the developing world to work their way out of poverty".

"The sugar regime is a clear example of Europe's blatant hypocrisy in dealing with developing countries," according to Phil Bloomer of Oxfam.

"They pressurise poor countries to open their markets while protecting their own through tariffs and subsidies," he said. "International trade has the potential to help lift millions of people out of poverty, but it will never do this as long as we continue with the current rigged rules and double standards like those maintained through the CAP."

Oxfam says that quotas and tariffs set Europe's sugar prices at almost three times the world market price, meaning huge subsidised surpluses are dumped annually overseas, depressing world prices and pushing other exporters out.

According to Oxfam's analysis, the EU is one of the world's highest-cost sugar producers, but also the world's biggest white sugar exporter, with 40% of the 2001 total.

Producers from outside the EU, some of them from very poor countries, face a tariff of 140% on exports destined for Europe. At the same time, Oxfam says, the World Bank and the IMF have been pressurising developing countries to cut their own sugar import tariffs.

The sugar regime costs EU consumers and taxpayers 1.6bn euros ($1.57bn) annually, it says.

Impact in Africa

One of the world's lowest-cost sugar producers is Mozambique, where almost 75% of the rural population live in extreme poverty.

Almost entirely shut out of the EU sugar market, Mozambique has lost the chance to earn an estimated 108m euros ($106m) from sales by 2004.

The EU's annual development aid to Mozambique is 150m euros ($136m).

Oxfam wants an immediate 25% cut in Europe's sugar quota production, an end to dumping, and "full and immediate access for imports from the least developed countries".

It is urging leaders attending the WSSD next week to end similar trade policies on other products as well as sugar, and says that developing countries should be allowed to liberalise markets at their own pace.

Kate Rayworth, author of the Oxfam report
"Because of subsidies Europe over-produces sugar"
The BBC's Mark Doyle
"Third world farmers, are excluded from the EU market by a high tarriff barrier"

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