Price-slashing EU sugar regime reforms have failed to encourage enough processors to give up production and growers are not fully integrated in the process, a leading UK growers' representative said on Tuesday.
"Our main concern is that processors have had two years to restructure and take the aid and have failed to take the aid," said William Martin, vice-chairman of the National Farmers' Union Sugar Board. "We share everyone else's assessment that the reforms haven't worked so far," Martin, a Cambridgeshire sugar grower, told Reuters.
The European Commission has staged price-slashing reforms to its long-standing subsidised sugar regime, reducing supports to growers and helping inefficient producers to quit the industry in order to create a fairer playing field in global sugar markets. Martin said too few processors had surrended sugar production, which meant surpluses remained and prices were depressed in the EU market.
"Some processors seem to think they will be bailed out by the (European) Commission," he said. "The Commission at the end of the reform process can impose unilateral quota cuts across member states." Martin added that EU growers had not been fully involved in the reform process.
"We are trying to encourage the Commission and member governments to accept that growers have an equal share in the debate," he said. "Growers need to be given the possibility to help solve the EU sugar surplus." In some cases, processors had failed to scale back output because certain EU member governments had tried to support their sugar industries, Martin said, referring to countries that had recently joined the EU.
Martin said he expected EU exports to fall below the World Trade Organisation (WTO) ceiling in the current 15-month 2006/07 marketing year. The export limit is based on the original annual WTO volume limit of 1.2735 million tonnes plus about 100,000 tonnes for the new member states on a pro rata basis across the marketing year.