EU to overhaul sugar regime

European Union (EU) Agriculture Commissioner Mariann Fischer Boel announced on Wednesday a dramatic reform of the bloc's nearly 40-year-old sugar regime.

The move is set to spark a fight among all the 25 EU member states and trade partners abroad, analysts warned.

"There is no alternative to a profound reform. The easy option would be to sit on my hands but that would mean a slow and painful death for the European sugar sector," Fischer Boel said in a statement at the launch of the reform proposal.

The proposal, which must be agreed to by agriculture ministers and the European Parliament before it goes into effect, suggests cuts of 39 percent to the support price of white sugar.

Sugar producers currently get about 632 euros (about 759 US dollars) per ton, roughly three times the world price of sugar. After the final cuts come into effect, which will be phased in over two years beginning July 2006, the support price will drop to 385.50 euros (about 460 dollars) per ton.

Farmers groups claim the reform proposal is "draconian" in style and threatens several hundreds of thousands of direct and indirect jobs in Europe.

The only ones to benefit from sharp drops in prices for sugar are industrial sugar users, like candy and soft drinks manufacturers.

EU agriculture ministers are likely to water down the proposal beginning in July.

The Commission wants the ministers and the parliament to approve the reform by November so it can use it as a bargaining chip during World Trade Organization ministerial meetings in Hong Kong this December.

Source: Xinhua