[an error occurred while processing this directive]
BBC News
watch One-Minute World News
Last Updated: Thursday, 24 November 2005, 00:03 GMT
Sugar producers see crisis ahead
By Nita Bhalla
BBC News

As the midday sun beats down on the sugar plantations of Triolet in northern Mauritius, workers in straw hats and rubber boots wield their machetes slicing through stalk after stalk of sugar cane.

Sugar farmer in Mauritius
For many people, sugar farming is the only work available

62-year-old Lakshami Chummun is one of thousands in Mauritius who toils in the sugar plantations throughout the six-month harvest season, cutting sugar cane to be processed to raw sugar and sent to Europe.

"The work is hard but I have no choice as my husband died in an accident and I have no other means to work except by cutting sugar cane," says Lakshami.

"The sugar industry is very important for me and if there is no sugar cane I don't know what I will do as I am too old to train for another job."

But now Lakshami and hundreds of thousands of sugar workers in Mauritius and other former European colonies face a threat to their livelihoods, as the European Union plans a massive overhaul of its sugar policy.

European Union ministers are discussing proposals to slash subsidies for sugar exports from African, Caribbean and Pacific states by 39%.

The move follows a World Trade Organisation ruling that the above-market prices paid to European sugar producers - and to those in former colonies which have special access to EU markets - constituted unfair trade.

Social upheaval

But the 18 sugar producers among the 79-strong group of ACP countries - including Mauritius, Swaziland, Fiji, Mozambique, Barbados and Kenya - say their developing economies are ill-equipped to deal with the cuts and are warning of social upheaval if the proposed reforms go ahead.

"We want a reform that is just and fair and not a reform which is going to have such a violent disruption to our economies," says Arvin Boolell, Mauritius' agriculture minister and spokesperson for ACP sugar-producing countries.

We have never gone around with a bowl in our hands... and yet we are now being penalised for our efforts
Navin Ramgoolam, Mauritius Prime Minister

"The effect of the price cut is going to be so devastating that we are talking of massive poverty and social upheaval," he says, adding that many ACP countries are net food importers who will not be able to provide basic staples and medicine if the reforms go ahead.

Under the Sugar Protocol signed with the EU in 1975, ACP countries have enjoyed duty-free deals allowing them to send 1.3 million tonnes of raw sugar at fixed prices to the EU every year.

The tiny Indian Ocean island of Mauritius accounts for more than a quarter of all ACP sugar exports to Europe, and the crop generates 4% of the nation's gross domestic product (GDP).

Since sugar cane was introduced by the Dutch who discovered Mauritius almost 400 years ago, the sweetener has become the island's only commodity and one of the main export earners - generating over $332 million last year.

Officials say revenue earned from sugar exports to the EU have allowed Mauritius - a former French and British colony - to diversify from a sugar-based economy into other sectors such as tourism, financial services and textiles, making it one of the strongest economic performers in Africa.

"In Europe they are writing off the debt of very poor, highly indebted countries, but then at the same time here is a country like Mauritius which has made efforts to develop into a middle income country," says Dr Navin Ramgoolam, Mauritius' Prime Minister.

Sugar cane
What will be left of ACP countries' sugar industries after the EU reforms?

"We have never gone around with a bowl in our hands saying give us this or give us that and yet we are now being penalised for our efforts," he adds.

Knock-on effects

Experts estimate that about 300,000 people are directly employed in the sugar industry across all the ACP states, but industry officials say that when the families of sugar workers are included, the proposed cuts will affect millions.

They add this would result in a total loss of revenue of $310m (180m) annually - a hefty sum for developing nations who still have to contend with bringing basic needs of food, housing, health and education services to their people.

ACP states say the knock-on effects of this reform would result in the crippling of national efforts to meet the UN Millennium Development Goals, the failure of smallholders' cooperatives and collapse of local farmers' banks, massive unemployment and an increase in poverty and crime levels.

They say they want a smaller price cut over a period of eight years and much more than the 40m euros compensation currently being offered by the EU for 2006.


SEE ALSO:
Q&A: Sugar subsidies
19 Sep 05 |  Business
EU sugar reform splits exporters
22 Jun 05 |  Business
Sugar sector 'must reform or die'
22 Jun 05 |  Business


RELATED INTERNET LINKS:
The BBC is not responsible for the content of external internet sites


PRODUCTS AND SERVICES

Americas Africa Europe Middle East South Asia Asia Pacific