Mauritius demanded the European Union provide massive funds on Tuesday to save its centuries-old sugar industry from ruin when the bloc starts slashing prices under a subsidy reduction scheme. Mauritius fears price reductions of about 40 percent expected to be announced by the EU on June 22 will cripple a sector that provides much of the country's foreign currency, mainly through sales to Britain's Tate & Lyle.
Agriculture Minister Nando Bodha told delegates from the EU's executive Commission that money would be needed fast to accelerate a 10-year modernisation plan to help the world's seventh largest exporter survive the reductions.
"Massive inflows of funds are required and we expect the Commission Delegation to give us specific indications on the availability and time frame for disbursement of funds as well as the terms and conditions," he said, without giving a figure.
"We need to move very fast and frontload our investments and cost reduction programmes," he told a meeting held to launch discussions with the EU on proposals to soften the blow.
An official from the EU Commission's development department welcomed the reform plans, although she said it was too early to say how much aid the EU might grant Mauritius.
"It's good that they have come up with an ambitious plan," said Florence Van Houtte. "We recognise that diversification is easily said but not easily done," she told Reuters after attending the meeting in the capital Port Louis.
The island has particularly strong links with the EU market, supplying 38 percent of a 1.3 million tonne annual sugar quota established under a 1975 protocol the bloc agreed with various developing world producers.
The threat to the sugar industry has become an important campaign issue ahead of July 3 elections, in which the government of Prime Minister Paul Berenger is facing a tight race with the opposition Social Alliance.
The EU's Commission has said it will compensate an 18-strong group of sugar-growing African, Caribbean and Pacific (ACP) countries - for which Mauritius is the leading political voice - but many farmers fear bankruptcy.
"I personally don't see how we can survive that kind of price cut," Denis Pilot, general manager of Belle Vue Mauricia SE, which runs the biggest cane processing factory on the Indian Ocean island of 1.2 million people.
"The sugar cane will be destroyed, it will be bush all over the place," he told Reuters at his plant.
Relying on sugar for foreign currency at a time when its textile sector is also under threat from changes to global trade rules, Mauritius says it has improved efficiency on an isle where costs are higher than in rivals like Brazil.
The opposition alliance led by former prime minister Navin Ramgoolam says the government's reforms have only helped "sugar barons" - Franco-Mauritian descendants of French settlers and slave owners - rather than poor labourers.
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