What Is The EU
Economic and political union of 27 member countries in Europe
75% of the world's sugar is from sugar cane in LICs
The rest is from sugar beet which is more expensive as it is from HICs so to make them more competitive on the market the EU protects domestic sugar beet producers agianst competitive LIC imports.
Europe supplies 80% of the world's sugar beet but it only makes up 20% of the global sugar trade
How Does The EU Support Sugar Beet Farmers?
- Support Prices = is the minimum guaranteed price to the growers of sugar beet so they can support thier livelihood
- Production Quotas = to limit over production
- Tariffs and Quotas on imports from LICs
- Subsidies to export surplus production out of the EU
How Did They Try And Not Make The Development Gap
To stop LICs getting affected some of the least developed countries get unlimited access and some other LICs got specific controlled import quotas since many reyl primarily on one industry
What Did This Result In?
Domestic customers in the EU have been forced to pay high prices for sugar
Low cost producers in LICs have faced depressed world prices and reduced trade opportunities
World Trade organisation found EU Sugar trade was in breach of WTO obligations so it went through a reform:
- Reduction in EU sugar price by 36% over four years
- Sugar producers were slightly compensated
- Over quotas used for industrial uses (biogas)
Effects OF Reform
There was a reduction in EU self sufficency but it benefited LIC sugar exporters who relied heavily on the sugar trade to develop