Sugar cane - subsidies and fair trade

Small scale cane sugar farmers in developing countries have to contend with unfair competition on the global market. Their sugar has to compete with beet sugar produced in European countries.

European subsidies

European sugar is artificially protected by the European Union. It gives large subsidies to its own producers, and charges very high tariffs on incoming cane sugar imported from developing countries. These tariffs are so high they often exceed the prices farmers in developing countries are paid to produce it. As well as this, the European Union 'dumps' its surplus sugar on the global market at very low prices.

Unfair market for small-scale farmers

 Photo of man selling blocks of sugar in a market stall.
High tariffs on sugar coming from developing nations are very damaging to local sugar farmers and producers.

This has a big impact on the price of sugar worldwide, which is very damaging to the incomes of small-scale sugar farmers in developing countries. According to Oxfam, this led to foreign exchange losses in the region of 60 million US dollars for India in 2002.

Recently, the World Health Organization has called for the European Union to help make the global sugar market fairer, by changing its subsidy regime and abolishing its large tariffs on imported sugar. This would enable developing countries have more of an opportunity to sell their cane sugar to the European market.