EU sugar reform: Great news for Australia

And the ball is now firmly in America's court to do the same. Despite being the world's most efficient sugar producer, lots of Australian sugar mills have closed in recent years due to protectionism in their major markets

"Britain has brokered an agreement to reform the last remaining fully protected area of European agriculture, cutting sugar prices, phasing out quotas and bringing an end to sugar mountains. The first reforms since the postwar period to the EU's much criticised sugar regime will cut prices by 36 per cent, destroy 100,000 jobs in Europe, end sugar farming in countries such as Ireland and Greece, and lead to economic devastation for Europe's former colonies in Africa and the Caribbean, which also benefited from the rigged market.... As well as European consumers and taxpayers, the reforms will also benefit efficient sugar producers such as Brazil, Thailand and Australia, who had taken successful legal action against Europe to force it to end its protectionism. It will also help some of the poorest African countries, who will get far better access to the EU market from 2009.

Under the reforms, prices will be cut by 36 per cent over the next four years, but the world's producers will not get free access until 2020. European sugar farmers and processors are being given billion euros (4.8 billion pounds) in compensation to help them to adjust to the new industries. Former colonies that lose out will be given 40 million euros next year.

Under the reforms, Ireland will be forced by quota cuts to shut down all its sugar beet production, while Italy will give up half its production quotas. Official estimates predict that European sugar production will drop by one quarter, and that 90,000 of Europe's 325,000 sugar workers will lose their jobs. With Europe's pampered and inefficient farmers largely unable to compete in the global market, the Commission predicts that all sugar exports from Europe will stop, and the EU will turn into a major sugar importer.....

The Common Agricultural Policy kept sugar prices in Europe at more than three times the world level. It led to huge sugar surpluses, which were dumped on the developing world, often undermining local farmers. However, sugar cane farmers in former European colonies, mainly in Africa, had preferential access to the European market, enabling them to sell at well above world rates...."

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