New Poland will still fight EU sugar reform

By Chris Mercer

- Last updated on GMT

Related tags Eu sugar reform European union Eu

A new centre-right government in Poland is unlikely to curb the
country's strong opposition to EU sugar reforms as Commission
representatives look for common ground to break the 'no' camp.

A new coalition government between Poland's two main centre-right parties, the Christian democrats and the liberals, now seems likely in Poland after last week's elections.

The new era, partly run by a Civic Platform party more open to free markets, could offer Poland and the EU Commission a chance to reconcile their differences over the proposed reforms to the EU sugar regime.

Yet, this seems highly unlikely according to Dr. Jan Rybski, of the Polish Sugar Federation. Rybski told​ that, from his information, he expected the new agriculture minister to be a Christian democrat.

"If yes, the Polish position to EU sugar reform will remain hard against any solutions,"​ he said. The Christian democrat Law and Justice Party is still fairly pro state interference.

Current reform proposals include a 39 per cent cut to EU sugar prices over two years; something generally expected to hit sugar and sweetener suppliers but bring cost-savings for food and drink producers.

Rybski said the problem is that the Commission's reform proposals are not only viewed as bad news for Polish sugar beet industry but for the whole Polish economy; something the centre-right parties were elected to improve.

Poland currently has the highest unemployment rate in the EU and has been hovering at about 18 per cent for more than a year.

A recent situation report by the US Foreign Agricultural Service (FAS) said Polish officials opposed EU plans to merge A and B quotas: sugar for domestic use at guaranteed prices and sugar for export at guaranteed prices.

Poland has a small B quota (92,000 tonnes), which means any reduction in a combined quota could force the country to import sugar to meet domestic demand even though it is the EU's third largest sugar producer behind Germany and France.

Rybski said he was also concerned that there was "no money in the proposal for the investments"​ needed for restructuring. The FAS report said new equipment was a primary need for many Polish sugar producers.

Rybski also believes Polish producers will seriously struggle to cover their production costs. The FAS said a number of beet farmers worried that processors will move beet production to larger, more competitive farms in France and Germany.

Commission representatives recently visited Polish officials for an exchange of views on the current sugar reform proposals.

The worry for the Commission is that it knows Poland's stance could be pivotal in forming an anti-reform alliance in the Council of Ministers, because of the weighted voting system set according to population size.

Poland's opposition, along with that of Italy, Spain, Portugal, Finland, Ireland and Greece, would be enough to block reform plans in the Council and prevent the Commission from making progress before the WTO meeting in December. The WTO has twice ruled the EU sugar regime illegal for maintaining prices at three times the world level.

Britain, France and Germany may look to bring political influence to bear on the 'no' camp, whose members are not necessarily against all aspects of the reform plans. The Commission believes most countries recognise the need for some reform.

A divide and rule strategy may also break up the bloc, but would also likely lead to some kind of concession from the Commission. The FAS reports that Poland has already been promised the same compensation levels as farmers in the pre-enlargement EU-15.

If the anti-reform bloc continues, it could also give strength to others. Slovenia's agriculture minister, Marija Lukacic, recently said the reform plans were far too radical, according to a local business journal.

Slovenia has long argued that reform threatens the existence of its only sugar production factory. The country would prefer slower reform and more compensation.

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