EU ministers face an agonising choice over whether to let national sugar industries collapse, due to plans to change the production quota system, Europe's leading farmers' union said on Tuesday. So far the EU's long-debated sugar reform plan calls for hefty cuts in the internal EU sugar price, more than three times the world market, and annual production quotas.
It would also allow EU sugar industries to sell quotas to rivals in other countries if the lower price made operations unviable. Many less efficient operations would almost certainly disappear, with potentially thousands of job losses.
"For us, it's the most difficult problem and for the member states: to decide that quotas go from one country to another, or that one country will not have quotas," said Franz-Josef Feiter, secretary-general of EU farmers' union COPA-COGECA.
"Politically, it's very difficult for ministers and presidents to take a decision like that," he told Reuters in an interview. "We are against quota transfer...but if it is decided, we need the agreement of the industry and farmers."
Ministers are expected to agree later this year on the plan to reform the sugar regime, barely touched since it was devised in the late 1960s. November is the month set for a deal. The European Commission, which authored the plan, sees quota transfer as a way to help industries unable to cope with lower revenues leave the sector, and says it will offer compensation.
Critics say it will raise the dominance of the few big players that have controlled EU sugar for decades, and focus beet-growing in only a handful of countries.
Most member states oppose the idea and EU insiders say the pressure to scrap it may now be enough for the Commission to recommend instead a quota buy-back scheme, where Brussels would buy rights from producers who were struggling to survive.
The Commission's final blueprint will only be known after the outcome of an EU appeal against a World Trade Organisation (WTO) ruling that upheld a complaint that Brussels is breaking WTO rules with its sugar subsidies.
Feiter said he agreed with the Commission's wish for a deal on sugar reform before a WTO meeting in Hong Kong in December.
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