Mauritius sugar growers urged to merge farms

Mauritius sugar planters must merge their small plots into industrial-sized farms if they are to survive competition and planned European Union subsidy cuts, the agriculture minister said on Monday.
Minister ARVIN Boolell asked farmers to urgently embrace reforms and not wait for aid from the European Union. "We don't know (what) we will get from the European Union," Boolell told members of the Chamber of Agriculture, which groups the Indian Ocean island's sugar producers. "We have to cluster our strength. Without this critical mass, there will be no sugarcane sector."
The EU will cut the preferential price it pays for sugar from 18 African, Caribbean and Pacific (ACP) countries by 36 percent in the next four years, starting in July.
The EU says it aims to give 165 million euros ($207 million) of aid annually until 2013 to help ACP countries to adapt to the changes. But the amount will be determined by its annual budget. Mauritius sugar producers say the EU cuts will knock 4 billion Mauritius rupees off their annual revenues.
Boolell said it was imperative that the small planters, who produce nearly 40 percent of the island's roughly 500,000 tonnes a year of sugarcane, merge to become more efficient.
"We have to cut down on the cost of production. The small planters have to merge," he said. The EU is impressed with Mauritius reform plans and hopes to give it 25 million euros a year from next year.
Boolell said sugar would remain crucial to the economy. "We are talking about the survival of a sector that has enabled us to achieve economic mobility. We can turn things around," he said. But producers say that without stronger commitments from the EU on aid, reforms will be hard to implement.
The EU has only definitively pledged Mauritius 6.5 million euros so far, to be dispersed this year. "There is no formal commitment from the European Union for the following years," said Christian Food Kune, president of the chamber of agriculture.
"This lack of visibility is making it impossible for us to finance our reforms." Central to the sugar sector's reforms are a plan to merge farms, diversify out of raw sugar cane into refined sugars and cut down the number of processing factories from 11 to four.