WTO REJECTS APPEAL FOR SUGAR PRICE SUPPORTS

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SUVA. Fiji (Fiji Times, April 30) – Sugar prices will fall next year after the World Trade Organisation quashed an appeal by the European Union to continue to subsidise its farmers above current world market prices.

The decision was made on Thursday.

The WTO decision will directly affect Fiji's sugar industry, as its preferential price agreement with the EU through the African, Caribbean and Pacific organisation was part of a complaint against preferential prices lodged by Australia, Brazil and Thailand.

The three countries complained the EU was not conforming to the WTO agriculture agreement, which does not allow the subsiding of commodity prices in order to allow countries to compete on an open and fair global market.

However, in support of the EU, Fiji, as a member of the ACP, made submissions alongside the US, New Zealand and Canada who all had an interest in the case.

Fiji Sugar Marketing Company Limited managing director John May said already sugar prices had been proposed to fall by as much as 23 per cent next year from the current above market price of $523.7 per ton. Under the WTO decision, the EU has 15 months to conform. "We've been expecting this decision all along," Mr May said.

"It's obvious we will have to make some changes."

Another EU proposal leaked during an ACP meeting in Africa last year could see the price fall a further 14 per cent in 2007.

"Since the decision has been made, it's expected sugar prices will fall as early as July of next year when the new sugar agreement comes into force," Mr May said.

National Farmers Union general secretary Mahendra Chaudhry said Fiji was expected to lose $120 million in sugar earnings because of the WTO decision. He said this could aggravate the acute poverty faced by 200,000 Fiji citizens who depended on the sugar industry for a livelihood because of expiring land leases and the fall in sugar price.

However, Mr May said the EU had already promised to set aside funds to help Fiji to adopt to the changes brought about by the WTO.

This, he said, was still to be finalised but a proposal prepared by the Government "will clearly set out the kind of help the Fiji sugar industry needs". "This help will boost productivity levels in our sugar mills and reduce the cost of production for the Fiji Sugar Corporation.

"We hope with Britain assuming the presidency of the EU next year, they will push the proposal along," Mr May said.

Minister for Agriculture Ilaitia Tuisese said the Government realised the need to revive and improve the industry despite the WTO decision. He said the Government was already working on restructuring the industry with help from the Indian Government as well as a proposed alternative livelihood project.

Foreign Minister Kaliopate Tavola said they had been expecting the decision all along.

May 2, 2005

Fiji Times: http://www.fijitimes.com/

 

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