Brownsugarexporter.com - The deregulation of the European sugar
market is looming. A French parliamentary report has requested support to
French overseas departments where the sugar sector is fragile.EurActiv France
reports.
French
sugar production in its overseas departments is poorly equipped to cope with
the liberalisation of the European sugar market planned for 2017. According to
a report by the French parliament, ending European support of the sugar sector
will harm production in France’s overseas departments.
Many
people in French Guiana, Martinique, Guadeloupe, and especially the Reunion,
live from the proceeds of the sugar industry, which is currently protected by
European regulation.
Preferential
treatment
In 2017,
the EU Common Organisation of the Market in the sugar sector will bring an end
to production quotas by country, and market price support, which allows
European producers to sell their unsold stock at a minimum price guaranteed by
the EU.
The
current system was called into question in 2006, when the World Trade
Organisation (WTO) restricted European sugar exports after a complaint from
several producing countries accusing the EU of dumping.
To end
these restrictions, the EU announced it would reform the sugar industry in
2015, but thenpostponed it to 2017.
A long
awaited reform
The 2017
deadline is eagerly awaited by large sugar beet producers, the most competitive
producers in the sector. "European sugar beet would like to see an end to
the quotas. However, it is clear that there will be winners and losers,"
stated Philippe Gosselin, UMP member and author of the parliamentary report.
The reform
should make European prices conform to world prices, which are currently lower,
and increase the competitiveness of the European sector.
Sugar beet
producers have been waiting and preparing for this change for years. "The
European sugar beet industry began restructuring for an eventual liberalisation
in 2006. Today, they are just waiting for the end of quotas to release their
production capacity," warned Jean-Claude Fruteau, President of the
overseas delegation and co-author of the report.
The
opening of the European sugar market will be difficult for the French overseas
departments. According to the report, the sugar sector directly or indirectly
employs approximately 20,000 people. "In a department like Reunion, there
are two economies: sugar and tourism," explained Jean-Claude Fruteau.
Sugar
production threatened due to lack of competitiveness.
Increased
competitiveness is a significant economic and social burden in departments
where the production is "not yet completely mechanised", claims
Philippe Gosselin. He argues that the French overseas sugar sector is not
likely to survive increased competitiveness when the market is opened in 2017.
There is a
substantial competitive difference between sugarcane and beet: after taking
into account EU grants, sugarcane is on average €200 more expensive per tonne.
After 2017, this difference is set to increase to €237.
To prevent
a destabilisation of the sugar sector, members of the French parliament called
on the French state to increase financial support to sugar producers in its
overseas departments. The maximum state aid to overseas departments is
currently €90 million.
"We
must increase the current €90 million state aid limit to €128 million. Without
this increase, we will have big problems," warned Philippe Gosselin.
"France
must negotiate an increase with the European Commission," claims
Jean-Claude Fruteau. This request would require a revision of regulation on aid
to agriculture sectors in the outermost regions of the Union, and the go-ahead
from Brussels.
Other
suggestions include taking steps to receive a Protected Geographical Indication
for brown sugar production in French overseas departments at a European level.
Global
competition
Nevertheless,
European sugar beet producers will not be the only ones to profit from opening
the market.
Thanks to
commercial preferences granted by the EU to a number of countries like Panama
and Colombia, tariffs on sugar imports were decreased. "The problem is
that the producers from these countries do not always respect the norms imposed
on European producers" argued Jean-Claude Fruteau.
To deal in
part with this new competition, the report also proposes maintaining tariffs on
brown sugar imports from other countries. (BD)