Sugar quotas

Generations of sugar cane farmers have relied on European markets to make a living but they will now see revenue from their exports drop. We talk to Fairtrade’s John Walker to find out more about the controversial decision, why it was made, and how it will affect farmers around the world and consumers in Europe.

Charlotte Richardson Andrews: The decision to lift quotas will push over 200,000 farmers and workers from African, Caribbean and Pacific countries into poverty as they lose out to cheaper, subsidised European sugar beet producers. Despite the EU encouraging sugar production by vulnerable smallholder farmers with one hand over the past decade, market access for the same producers is now being taken away with the other. How was this decision made, and how have policy makers justified it?

“The slump was as a result of oversupply."

John Walker: The proposal to lift quotas in 2017 was made behind closed doors, when the Council of Agriculture Ministers and the special rapporteurs from the European Parliament [EP] discussed the Common Agricultural Policy reform. Originally, the European Parliament had recommended that the quotas be extended to 2020. The 2017 proposal, which was a small part of a raft of decisions, was then ratified by the EP.

There was significant lobbying to remove the quotas, with the aim of reducing the price of sugar – which at the time of the decision was at a high level as a result of an artificial tightness between supply and demand in the EU.

Regardless of the rights or wrongs of removing the quotas, what the politicians and others that advocated for the change have missed is the devastating impact [this will have] on the African Caribbean and Pacific smallholder farmers, and the communities that they live in – who have relied on this trade for generations. Many of these are in Least Developed Countries.

CRA: These reforms coincide with a sharp slump in the global sugar price, which has halved in three years. What has driven this slump?

JW: The slump was as a result of oversupply. Some countries have subsidised production. Interestingly, the EU’s own production of sugar receives some subsidy.

CRA: How will these reforms affect farmers – especially the vulnerable ones in African, Caribbean, Pacific (ACP) and least developed countries (LDC) around the world? Does this speak to the findings published in your Sugar Crash report?

JW: Research for the Department for International Development published in 2012 was clear: the changes would push 200,000 people into poverty, and potentially many more if the world price of sugar was low.

"The changes would push 200,000 people into poverty."

We are seeing the impact in terms of lower prices for sugar cane farmers. There are discussions happening in countries such as Jamaica on the future of the industry; Swaziland discussing the impact of reduced prices; Malawi looking for alterative markets or huge investment in Fiji as they make a concerted effort to ready the industry for the change.

CRA: The Sugar Crash report points out that: ‘Although the EU has provided funding to support sugar cane farmers through the transition, it has not always been directed effectively and in many cases its impact will not be felt in time.’ Can you elaborate on this?

JW: A report for the European Union in 2010 said that, with the exception of Mauritius, programs ‘had delivered few tangible results’. In 2013, the Department of the Environment, Food and Rural Affairs said the impact of the fund was unlikely to be felt in time to cushion the impact of the reform.

It is probably worse than that; in some countries, the money has been used to encourage an expansion in sugar cane farming and now those same farmers encouraged into the industry have an uncertain future. In general, it is seems there has been a lack of communication with those that will be worst impacted by the reforms, including vulnerable smallholder farmers, to help understand how lost income will be replaced.

CRA: Will the reforms affect consumers in Europe? If so, how?

“The solution lies in the hands of the European Commission and British politicians.”

JW: Most European consumers will probably be blissfully unaware of the impact on farmers and their families, people far away with few other opportunities to earn money, keep a roof over their head, put food on the table and their children in school.

CRA: What’s the solution? Please talk us through your five-point agenda for trade policy coherence, and the initiative you’re campaigning for the EU to lead, which would bring together government business and civil society to protect farmers.

The solution lies in the hands of the European Commission and British politicians. Britain takes around 25% of all imports of cane sugar and has a historic link with many of the communities that rely on cane sugar exports to the EU. The European Commission needs to lead a new initiative that brings together government, business and civil society. Crucially this must also include farmers. British politicians should be holding the European Commission to account.

CRA: How can the public take action in the meantime?

JW: The public can support farmers and the communities they live in by buying Fairtrade sugar. This releases an additional Fairtrade Premium of $60 a tonne, or $0.06 a kilo. This is vital at a time when farmer income from the sale of sugar cane has fallen sharply.

During this past Spring, 75,000 emails were sent to MEPs about this issue. That was followed by the Show Your Hand Campaign on wider policy coherence with influential MEPs from the European Development Committee, who has recommended that the European Court of Auditors look into the effectiveness of the Accompany Measures Sugar Protocol fund administered by the European Commission.