NCPA - National Center for Policy Analysis


July 22, 2004

The European Union (EU) is the second-biggest sugar exporter. However, the European climate is ill-suited for this agriculture: a pound of sugar in the EU is more than six-times higher than in Brazil. The only way to keep their farmers in business is through massive subsidies and tariffs, costing an estimated 2.2 billion euros, notes a report by Oxfam.

This sugar protectionism hurts the developing world. Not only do the subsidies and tariffs deny the European sugar market to developing nations, they force European farmers to export sugar to other markets like Algeria, Ghana, and Indonesia. According to Oxfam:

  • Because of sugar protectionism, Brazil and Thailand -- two of the most efficient sugar producing nations -- lose $500 and $151 million a year respectively.
  • Mozambique will lose $38 million in 2004, as much as it spends on agricultural and rural development.
  • Ethiopia loses a sum equal to the amount it spends on its HIV/AIDS programs.

The biggest benefactors are large European sugar refiners, says Oxfam. Some companies benefit by as much as 250 million euros, mostly at the cost of poor nations.

Source: "Oh, sweet reason," Economist, April 17th, 2004; based upon, "The Great EU Sugar Scam," Oxfam, Oxfam Briefing Paper 27, April 2004.


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