RIGA - Reform planned by the European Commission in the sugar industry may cause serious problems for Latvia's sugar producers and sugar-beet growers, Agriculture Minister Martins Roze said in a Cabinet meeting on July 13.
The EC is planning three possible solutions for the reform of the sugar industry in the European Union - namely, either retaining the present system involving a strongly protected and regulated market or reducing prices and gradually repealing production quotas in order to make Europe's sugar market more competitive.
The third solution would call for an immediate liberalization of the market, repealing restrictions for sugar imports from the rest of the world.
Roze said Latvia supported either retaining the present policy or, in the worst case, the second solution involving price reduction and gradual repealing of production quotas.
Latvia has more chances to stand out for the second solutions, since maintaining the present policy would not provide for attaining the reform goals in the sugar industry - i.e., making the industry more competitive and offering fairer prices to consumers.
Roze said that in such a case the reduction of the sugar price should be carried out gradually, otherwise the existence of the sugar industry in Latvia would be endangered. He added that Latvia supported a position that in such a case the price reduction should be fully compensated to sugar producers and sugar-beet growers.
Roze said the sugar reform issue was to be considered at the EU agriculture and fisheries issues council meeting on July 19.
Latvia has exerted considerable efforts so far to align its sugar industry related legislation with the EU provisions. Much has been done to achieve the sugar protection quota in talks with the EU, and investments have been made to bring the industry in compliance with the EU requirements.
Latvia has two sugar factories operating in Liepaja and Jelgava. Before accession to the EU only domestic sugar could be used in the food industry, while sugar imports were subject to special licenses. After accession, Latvia had to open its sugar market to other EU producers.
Although the sugar market in Europe is subject to strong regulation, Latvia's sugar factories are already complaining of dwindling sales.
