5 September, 2014

Crisis for Sugar Cane Farmers

Sugar cane worker
by John Walker, Product Manager, the Fairtrade Foundation

Fairtrade sugar has been a success story. In 2013 over $13 million in Fairtrade Premiums went back to over 60,000 smallholder farmers in countries such as Belize, Fiji, Malawi, Mozambique, Zambia and many more. This money was spent by smallholders on productivity, environmental and social projects.

UK consumers and businesses have made the UK the biggest market in the world for Fairtrade sugar accounting for just over 70% of that US$13 million in Fairtrade Premiums. Around 40% of the sugar sold in shops is traded to Fairtrade standards in the UK as is the sugar in some of our favourite chocolate bars and ice cream.

Whole communities in countries in the South rely on exports of Fairtrade and conventional sugar to the EU. In many cases this trade has gone on for a very long time. These communities, who often have few other options to sugar cane farming for export, are now facing an uncertain future.

As Marciano Novelo, a Belizean sugar cane farmer for 15 years and part of a Fairtrade producer group of over 5,300 farmers, said to me on a recent visit to his farm: "As a cane farmer, sugarcane means a way of living for me, a way of sustaining family, my children and providing work for our own people." Over 85% of Belize’s sugar production is exported to the EU and the majority to the UK.

Over the last twelve months there has been a dramatic fall in the price large businesses such as supermarkets, sweet manufacturers and soft drinks companies pay for sugar. This fall in prices is eventually passed back to the farmers.

The cause has its root in a change in the rules surrounding the production of sugar in the EU. Previously the amount of sugar that could be produced in the EU was strictly limited. The gap between this EU production and consumption created a market for imports of sugar from African, Caribbean and Pacific (ACP) countries and Least Developed Countries (LDC).

New EU rules mean that from 2017 there will be unlimited production of EU beet sugar and the market will move to one of oversupply leading to the very real risk of imports of cane sugar being squeezed out as EU beet sugar companies hunt for business. In 2012 the Department for International Development warned that the changes could push 200,000 people into poverty.

The price collapse in 2014 has been caused by a release of extra sugar onto the EU market. This has been combined with anecdotal reports of EU beet sugar companies seeking out business in markets such as the UK that has a history of providing markets for cane sugar imports.

Sugar farmers in ACPs and LDCs will be watching nervously as the latest round of contracts to supply the big supermarkets, chocolate and soft drinks companies concludes. All the indications are prices will be lower.

We are working hard to try and ensure that supermarkets and food manufactures continue to sell Fairtrade sugar. Please help by choosing Fairtrade when you are shopping. We may need you soon to help us ensure companies remember that Marciano and hundreds of thousands of people like him rely on the export of cane sugar to the UK and have few other options.

You can see a link here to a short video on sugar cane farming in Belize and Fairtrade, Marciano speaks at the end of the film http://www.youtube.com/watch?v=kyuJUMni-N0.

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