Sugar subsidies welcome

CANBERRA – Australia’s struggling sugar cane growers will substantially benefit from the European Union agreeing to cut sugar subsidies, an industry spokesman said Friday.

A successful World Trade Organisation challenge by Australia, Brazil and Thailand forced the EU into the cuts to its subsidy system that will reduce prices by 36 per cent. “It means that Australian producers are going to be far more competitive,” Ian Ballantyne, general manager of Queensland state sugar lobby group Canegrowers.he told Australian Broadcasting Corp radio.”There’s a lot more optimism, a lot more confidence in our industry going forward,” he added.Ballantyne said European production would fall by more than 20 per cent, or over four million tons of sugar a year.The EU agreed on a major overhaul of its sugar subsidy programme Thursday that the EU said would strengthen its hand in next month’s WTO summit in Hong Kong.Under the old system, production was supported by generous EU subsidies and import tariffs, all of which will be phased out over a four-year period starting in 2006.EU sugar prices are more than three times higher than the global market rate and are protected by hefty import tariffs.Brussels also pays out export subsidies to get millions of tonnes of sugar a year off its market.In April last year, Canberra promised to pump 444,4 million Australian dollars (around N$2 billion) over four years into the sugar industry to help downsize it and make it economically viable.The government offered Australia’s 6 700 cane growers up to A$100 000 each to leave the industry and up to A$50 000 for harvesters.The government had pledged to include the sugar industry in a free trade agreement with the United States which began this year but US sugar producers lobbied successfully to have it excluded.-Nampa-AFP”It means that Australian producers are going to be far more competitive,” Ian Ballantyne, general manager of Queensland state sugar lobby group Canegrowers.he told Australian Broadcasting Corp radio.”There’s a lot more optimism, a lot more confidence in our industry going forward,” he added.Ballantyne said European production would fall by more than 20 per cent, or over four million tons of sugar a year.The EU agreed on a major overhaul of its sugar subsidy programme Thursday that the EU said would strengthen its hand in next month’s WTO summit in Hong Kong.Under the old system, production was supported by generous EU subsidies and import tariffs, all of which will be phased out over a four-year period starting in 2006.EU sugar prices are more than three times higher than the global market rate and are protected by hefty import tariffs.Brussels also pays out export subsidies to get millions of tonnes of sugar a year off its market.In April last year, Canberra promised to pump 444,4 million Australian dollars (around N$2 billion) over four years into the sugar industry to help downsize it and make it economically viable.The government offered Australia’s 6 700 cane growers up to A$100 000 each to leave the industry and up to A$50 000 for harvesters.The government had pledged to include the sugar industry in a free trade agreement with the United States which began this year but US sugar producers lobbied successfully to have it excluded.-Nampa-AFP