Sugar Producer

August/September 2019

Issue link: http://read.uberflip.com/i/1147237

Contents of this Issue

Navigation

Page 19 of 23

20 Sugar Producer AUGUST/SEPTEMBER 2019 Unilateral disarmament doesn't work. A free sugar market will only be realized when every nation agrees to put an end to unfair subsidies. FROM THE ASA By Phillip Hayes | Director of Media Relations Warning Signals European Union serves as warning to sugar policy critics Thirteen years ago, the European Union (EU) was forced to begin tearing down its powerful sugar program after the World Trade Organization found it to be in violation of Europe's international trade commitments. Since that time, Europe's sugar industry has faced an uncertain future—83 sugar mills closed and 120,000 jobs were lost—and subsidies remain prevalent as prices plummet below the cost of production. A new report released earlier this year examined the alarming impact of these reforms on the EU's sugar industry. It should serve as a dire warning to those who would like the U.S. to follow Europe's lead and unilaterally eliminate U.S. sugar policy without addressing subsidies on the world stage. Authored by UK-based sugar policy expert Patrick Chatenay, this report took a closer look at EU sugar market conditions following the latest chapter in its reform: the end of sales quotas and minimum prices for sugar beginning in October 2017. "The immediate effects of liberalization have been catastrophic for the EU sugar industry," Chatenay wrote. Chatenay found that, now that they are exposed to the global sugar market and are susceptible to price fluctuations driven by foreign intervention, sugar farmers have seen an approximately 20 percent drop in prices while large industrial sugar buyers have pocketed $3.4 billion "with no discernable advantage to the final consumer." This transfer of wealth from farmers to food processors has necessitated additional taxpayer subsidies to help prop up Europe's farmers. Totaling nearly $700 million a year, EU subsidies have further distorted Europe's sugar market and driven prices even lower. "EU sugar now

Articles in this issue

Archives of this issue

view archives of Sugar Producer - August/September 2019