There was a time when empires engaged in bloody battles and political back-stabbing because of sugar. Slaves, human machines fuelled by flogging, were themselves a hugely successful unit of production. And again when it was time to abolish the trade in free human labour, sugar, along with coffee, were major motivators, as important as ‘human rights’ (though slaves were neither considered humans, nor did they have rights).

While Jamaica was the star colony in the British Empire, the French could boast St Domingue (the western part of Hispaniola, now Haiti) as their little jewel in the region. The French colony was so successful that it provoked the bitter jealousy of its rival. Ever so sly, the British devised a plan to sabotage the increasing wealth that St Domingue poured into the French economy; abolition of the West Indian slave trade. No slaves, no free labour and the French colony, which depended on sugar (mainly), coffee, tobacco, etc., was doomed. And thus, sugar helped to end the transaction of slaves. These days, sugar has lost much of its past glamour and will soon loose most of its European subsidies as well.

If, in the past, the West Indies satisfied European demands for sugar, the situation has now been reversed and the EU is the biggest exporter of white sugar to the world. How this happened is again a history of imperialism, this time economic. The EU and the US have always used poorer countries as satellite economies.

<B>The common agricultural policy</B>

The third world provided raw materials that they turned into finished products. For example, all the sugar that Mauritius exports under EU quotas is refined in Europe and then sold on the world market. These same policies were also pursued by the International Monetary Fund later. This explains why the EU accounts for 40% of all white sugar sold in the world.

The sugar is produced from beet grown in many countries across the EU, including Ireland and Poland. These countries are also feeling the brunt of the reforms. There are 3700 sugar beet farmers in Ireland and most of them cannot survive without the 96 000 euro hand-out of the EU. When the European Commission announced the dismantling of the sugar regime last year, Irish Sugar Ltd, the monopoly buyer of beet and refiner decided to cut its costs. 200 workers lost their jobs when one of the two factories closed. Many complained that Irish Sugar was being too rash in calling it a day without waiting for the full decision of the European Commission. But no one thought that the EU would defer on the World Trade Organisation decision.

Despite the complaints of Irish farmers, the sugar regime was nothing less than an aberration. The subsidies the EU guaranteed its members every year helped them to produce sugar at a very cheap price. Furthermore, high tariffs, up to almost 324%, denied other countries the vital European market. For former colonies, like Mauritius, in the African Caribbean Pacific (ACP) group, there was a special quota system. Of course, we benefited immensely from the high guaranteed prices and sugar became one of the engines of our economy. But the EU was distorting the market. Beet sugar costs more than twice as much to produce as cane sugar, but it was then sold at a low price on the world market, which made sugar from cane processors uncompetitive.

How did this situation come about? It all started with the Common Agricultural Policy (CAP) in 1962 among the European countries, which had earlier agreed a common economic area in Rome in 1958. In 1967, the sugar regime was included in the CAP and beet sugar producers laughed all the way to the bank. Every year the sugar industry in the EU gets 800 million euros in subsidies.

These subsidies allied to the high guaranteed prices in the internal market rewards the industry with a hefty profit. The US plays the same tune, financing its sugar sector to the cost of 1.1 billion euros annually. In effect, these subsidies allow the industry to produce sugar at a high price and sell it at a low price. Typically, a ton of sugar costs around 673 euros to produce but it can sell at the price of 157 euros on the world market. Simple logic would tell any ten-year old that a profit would be impossible under such circumstances. But, then again, logic is always associated with economics. The subsidies plug the gap between production costs and world market prices.

<B>Depressing world prices</B>

However, the real tragedy is the nefarious effects of subsidies on poor countries. The dumping of its excess sugar on the world market prevents countries like Mozambique or Brazil, cost-effective sugar producers, to access many markets. For example, the EU exports sugar to both Nigeria and Algeria. In fact, European sugar finds its way even to the Middle East. Thus, many countries are denied these sizeable markets, despite their cheaper production. Secondly, no matter how low the world price falls, the EU guarantees its farmers high prices on the internal market and through subsidies. This has the effect of depressing world prices, sometimes even below the production cost of countries like Malawi and Mozambique. Thirdly, without the CAP, the EU would be importing sugar every year and not exporting it, thus denying its market to many countries.

But this policy does not only apply to sugar. The EU flexes its economic muscles on all fronts in agriculture to bail out its farmers. It practises the vilest form of protectionism while it forces other countries to open their borders to its products. The double standards of the EU and the US, backed by the IMF and World Bank duumvirate has already sent many countries spiralling into poverty. Despite the concerns of Mauritius, which benefited from the high prices of the European market, it was high time for these unfair practices to come to an end.

<B>Diren VALAYDEN</B>

<I>Outlook Correspondent in Dublin</I>