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Last Updated: Wednesday, 22 June, 2005, 22:12 GMT 23:12 UK
EU sugar reform splits exporters
Sugar dispenser
EU proposes to sweeten the reform pill over eight years
EU plans to slash sugar subsidies by 40% have alarmed African and Caribbean states but were welcomed by Brazil, the world's biggest producer.

The cut will mean the loss of a guaranteed minimum price for exporters in countries like Tanzania and Guyana.

Guyanese President Bharrat Jagdeo contrasted talk of developing world aid with the loss of export revenue.

However, a top official in Brazil's sugar industry said the move towards a free market was a "good start".

"The EU sugar market was highly artificial... like Disneyland," Fernando Moreira Ribeiro, secretary general of the powerful Sao Paulo Can Agroindustry Union, told Reuters news agency.

But he cautioned that "in the short to medium term" there would be no gain for Brazil and other free-market producers.

Angelo Bressan Filho, a senior official at the Brazilian agriculture ministry, said Brazil did not want to disrupt the world sugar market.

"We want to find a smooth transition for those countries depending on quotas," he told reporters in Sao Paulo.

'Life-blood'

Under current EU sugar policies, 18 former European colonies in the African, Caribbean and Pacific (ACP) group benefit from preferential terms, sending 1.3 million tonnes of raw sugar at fixed prices to EU countries every year.

In future, ACP countries will still be able to export the same amount to the EU, but will be hurt by the price reduction.

By way of compensation, the EU has pledged an eight-year programme of assistance for ACP countries dependent on income from sugar exports, including $40m (21m) of support next year.

We see sugar as a way of life
Clement Rohee
Guyanese foreign trade minister

The plan to slash EU subsidies by 40% follows a ruling by the World Trade Organization that Europe has been dumping sugar on world markets.

The news was greeted by dismay among exporters in the region.

Mauritius, for example, will see a current guaranteed price of 523.70 euros per tonne fall to 319.50 euros by 2009-10, Reuters notes.

Mr Jagdeo told the BBC's Newsnight programme that debt relief agreed by the G8 would save Guyana $8m per annum but the sugar reform would bring it an annual loss of $40-45m.

His Minister of Foreign Trade, Clement Rohee, told the BBC that sugar was Guyana's "life-blood" and some 35,000 sugar workers in his country would be affected along with their families.

"We see sugar as a way of life in our country," he said.

"Go to any of the villages where sugar is cultivated... and ask a child to draw a painting. The first piece that will come to mind is something to do with sugar - either someone cutting cane or someone working in the fields."


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