Sugar and Fair Trade

Britain has for centuries had a sweet tooth, and since the Napoleonic wars to meet the demand for sugar British farmers have grown Sugar Beet as a crop so that it was not reliant upon imports for sugar. Even though this is a far more expensive way of producing sugar, sugar from cane is far cheaper to produce, the government has guaranteed the prices to farmers for over one hundred and fifty years. Even when Britain joined the then Common market of Europe, this system was allowed to continue.

As the EU from its inception following the second world war developed an agricultural policy designed to ensure that Europe could feed its self, this British sugar subsidy fitted well into the Common Agricultural Policy. Therefore while the average consumer thinks we have a free market in many foods, our politicians even tell us that they can not interfere with the major retailers as this (food) is a free market, in reality it is not.

While these interventions are frequently hidden, it costs the European tax payer two thousand Euros per year to maintain this cheap food policy. Yet the reality is that this cheap food policy hides the real cost of food production while allowing the large retailers to make vast profits. Equally the large scale industrial agricultural producers have often made vast profits chasing subsidies rather than growing the food that people want or need. This is one of the main reasons why the UK imports forty percent of its food.

In the primary commodity crops there is a significant over production. In most years this means that for commodities the free market price is low. The effect is that greater subsidies are paid thus the following year more of that crop is grown suppressing the free market price increasing the subsidy payment and feeding into this ridiculous cycle. While here I am talking specifically about Europe, the system is very similar in the US and Canada.

This is where Sugar and the growing of Sugar beet for sugar is so unique. Sugar beet is grown across Europe but mainly as a fodder crop for livestock. Also Sugar beet is a catch crop grown on land that is normally used for wheat and barely in the periods between a harvest and sowing of the next crop. Therefore, sugar beet is a real cash crop. For farmers in the years following the Napoleonic wars it must have been a welcome boost to income and as the beet has only ever been allowed to be sold to one company, British Sugar, the farmer had a guaranteed price and market for this crop.

But the Napoleonic wars were in the 19th century and we are now in the 21st century. Keeping a system in place that was designed for a situation that no longer exists is madness. But as with many aspects of the common agricultural policy it is nearly impossible to change any aspect, no matter how far it is past its sell by date.

With the British sugar subsidies reform is attempted to be implemented and this year the price that British Sugar will pay for sugar beet will be twenty-six pounds per ton while last year it was twenty-seven pounds per ton. The farmers have said that they will not even plant or grow sugar beet if that is all they will get. This small price cut looks as though it will help dismantle an industry that is no longer needed or wanted.

The sugar produced by British Sugar is heavily subsidised and if we were paying the true cost of producing this sugar were reflected in the price of a kilo of sugar on the shelves of supermarkets then it would be double the cost. While I am an advocate of any state ensuring its own food security, that only applies to the key commodities that are essential in the diet. Sugar from cane is far easier to produce and process. The only problem is that sugar cane can not be grown in Britain, we do not have the right climate.

Further by trying to produce our own sugar we are stopping imports of sugar and cane from developing countries where they need the foreign exchange to develop. While relying on the exploitation of the so called free market would not help the countries in developing world that grow sugar cane, there is a real opportunity to develop a fair trade system that enables genuine development for the poor.

If British Sugar develops a fair trade purchasing policy especially with the island states in the Caribbean, by ensuring a fair price is paid to the farmers, then in time we in will be enabling these developing countries will no longer need development money or aid. The current subsidy of sugar beet needs to change. We need a system that meets the needs of today not the 1850s. Changing the system to a fair trade system that benefits poor countries will reduce the amount of money the tax payers spoon out, while boosting the economies of the developing world. Also by enabling the developing world to export crops that we can not grow here, they can develop their health care and education systems and reduce third world poverty.