Caribbean & Central America - March 2006 (ISSN 1741-4458)
CARIBBEAN: Delegates travel to Europe to seek better deal
Government officials from St. Kitts and Nevis, Guyana and Jamaica travelled to Brussels on 8 March to ask for increased compensation for their countries' losses from EU subsidy cuts in the region's sugar industry. The officials met European Commission President Jose Manuel Barroso to ask for more yearly aid in 2007-2012 to help Caribbean sugar producers cope with the EU's 36% cut in sugar subsidies imposed in January.
The EU has earmarked 40m euros (US$47m) in aid for 2006, an amount St. Kitts Prime Minister Denzil Douglas called "paltry". The EU executive commission in December proposed offering 190m euros a year to Caribbean producers until 2013. EU member states have since suggested the funding start at 130m euros in 2007 and peak at 170m euros in 2013. The final amount will depend on the EU's 2007-2013 budget which has yet to be agreed. EU farmers who face the same subsidy cuts were to be compensated US$7.9bn.
For years the EU gave its former colonies in the African, Caribbean and Pacific Group (ACP) preferential access to its markets and paid high prices to encourage development. The WTO said the regime was unfair and ordered the bloc to reduce quotas and prices for sugar, as well as for bananas and cotton.
Douglas said Caribbean sugar producers would like to receive some of the money from the proposed EU fund upfront, rather than wait for instalments to be paid over six years. He said he discussed the issue with Barroso and Austrian Chancellor Wolfgang Schuessel, whose country holds the EU presidency until June, but has not received any assurances. "If this is not revisited, it could lead to social upheavals, economic instability and political unrest," said Douglas, adding that closing the sugar industry meant 9% of the country's work force would lose their jobs. "We had to borrow 10m just to compensate our people," he said. Nevertheless, if the EU's long term budget is less than proposed, Brussels will struggle to pay the full 190m euros originally proposed by the commission.