House of Commons - Environment, Food and Rural Affairs

Select Committee on Environment, Food and Rural Affairs Written Evidence

Memorandum submitted by The Centre for Holistic Studies, India, UK Network

EXECUTIVE SUMMARY

XS1 We believe that the emphasis of the review should be on sustainability rather than financial gain.

XS2 The most important principles in determining the future regime are those of bioregionalism and trade subsidiarity, ie sugar production should respect ecological realities and sugar should be sourced from as close to the final consumer as reasonably possible.

XS3 Ultimately, this means that UK demand for sugar should be met from UK production of sugar beet.

XS4 The unequal distribution of power in the world trade system, with corporations and certain nations dominating and the poorer nations being dominated, needs to be addressed if we are to achieve a truly free market.

XS5 We support the group of 10 EU countries calling for a self-sufficiency regime for sugar production and consumption.

XS6 We believe that reform of the sugar regime will make more land available in the UK for the production of crops to meet our needs for textiles, fuel and construction materials. We see this as a healthy development towards a sustainable, self-sufficient and bioregional economy.

XS7 This development is also consistent with DEFRA's vision of a sustainable future for food and farming in the UK.

1. INTRODUCTION

1.1 The discussion about the reform of the EU system of subsidies for the sugar industry is being focused on the issue of money, so that there is a conflict between UK and EU producers, producers from poorer countries, and the corporate interests who trade in and use sugar in their products as to who should gain most financially from the new market structure that is being established. We believe this is the wrong focus and that emphasis should instead be placed, as in all economic debates, on sustainability.

1.2 The principle informing the submission we offer to the Committee is that of bioregionalism, an ecologically grounded approach to the economy. Bioregionalism has at its heart two of the central principles of green economics: living in balance with the planet and respecting its natural cycles, particularly the carbon cycle. [17]Bioregionalism means living a rooted life, being aware of where your resources come from and where your wastes go.

1.3 Relating the concept of bioregionalism to the global market for sugar brings us to the idea of trade subsidiarity, which suggests that the distance between production and consumption should be as short as reasonably possible, depending on the type of good and the size of the potential market.

1.4 Trade subsidiarity as a principle is based on the vital importance of two facets of economic life that globalisation has ignored:

— International trade generates vast and unnecessary quantities of carbon dioxide that are causing climate change.

— Human economic and social security require a subsistence perspective and the use of self-reliance as a guiding principle.

1.5 This brings us to the conclusion that sugar for the UK market should be produced and sourced from within the UK. This is a long-term aim and will clearly have important consequences for poorer countries who have based their development policies on the prevailing free-market orthodoxy and are extremely vulnerable to any change. We will address these global issues in a separate submission to the second stage of the Committee's inquiry.

2. WHO IS SERVED BY THE SUBSIDY REGIME?

2.1 The argument from the EU is about the importance of creating a free market for sugar, as for other products, but we would question whether the global market is really free when certain corporations and national governments have so much power to control the legislative regime, the terms of trade, and the currencies in which trade takes place, and others have none.

2.2 EU sugar production of more than 17 million tonnes is larger than demand within the EU by between 2 and 2.5 million tonnes. The excess production is exported at artificially low prices because of the subsidy regime which undercuts non-subsidised production from poorer countries. [18]

2.3 Producers in the richer countries are protected both by the subsidy regime and by their political representatives' domination of the WTO and the global financial system. Producers in the poorer countries have no such protection and thus would be best advised not to engage in global trade in sugar or other commodities when the rules of the game are set against them from the start. They would be better advised to focus on domestic subsistence agriculture.

2.4 The debate about reform of the EU sugar regime is being dominated by the voices of two powerful interest groups: on the one hand the corporations who trade in sugar, especially the food manufacturers, and on the other the producers' groups, in the case of the UK British Sugar. The challenge to the existing regime proves that corporate interests are more powerful than farming interests and has nothing to do with improving the situation for producers in the world's poor countries or consumers of sugar in raw form or in food products.

3. A POSITIVE, SELF-SUFFICIENT RESPONSE FROM EU STATES

3.1 Ten EU countries have challenged the direction of reform of the EU sugar regime. Spain, Finland, Greece, Ireland, Italy, Portugal, Hungary, Latvia, Slovenia and Lithuania are adopting a self-sufficiency perspective similar to that suggested in our introductory remarks.

3.2 This group of nations want to continue to produce sugar for their own needs, adopting a localizing approach. They suggest that the focus of reform should be on member states that are net sugar exporters instead of on the imposition of cuts which would end production in some countries. [19]

3.3 CHS supports the argument for a self-sufficiency approach to the production of sugar by EU countries for their own need within their own national territories.

4. USE OF UK FARMING LAND FROM A BIOREGIONAL PERSPECTIVE

4.1 Under the regime proposed by the EU it has been suggested that production of sugar will end in many EU states. Only the UK, France, Belgium, Germany and Sweden have the production and processing capacity to cope with the proposed cut of 40% in support prices. [20]

4.2 The effect on farmers in the UK is likely to be severe: in Lancashire all 28 producers of sugar beet have already abandoned its production. [21]

4.3 Sugar beet is a particularly useful crop since it is most suited to fill a break in the rotation cycle of other dominant crops such as wheat, barley and peas. Even without subsidy the gross margin generated by sugar production will be larger than that for oilseed rape. [22]

4.4 From a sustainability perspective the land of the UK is underused and its use is distorted because of a history of poor farming practice and politically oriented subsidies. Over the long term policies should be designed to shift production towards crops used within the UK, increasing food security and moving towards self-sufficiency in fuel, textiles, and construction materials.

4.5 In the context of the UK this is likely to mean and an increase in the area of land dedicated to the production of biofuels, including coppice; the growing of textile crops such as flax and hemp; and the production of crops that can generate building materials.

4.6 The movement towards self-sufficiency of fuel, textile, and building crops, as well as food, should be underpinned by the introduction of a carbon tax, which would increase the cost of importing these items.

5. A BIOREGIONAL APPROACH TO MEET DEFRA'S VISION

5.1 We quote to the Committee an excerpt from DEFRA's Strategy for Sustainable Farming and Food:

"Our vision of the future is of a world in which climate change and environmental degradation are recognised and addressed by all nations and where low carbon emissions and efficient use of environmental resources are at the heart of our whole way of life: where, here in the UK, rural communities are diverse, economically and environmentally viable, and socially inclusive with high quality public services and real opportunities for all. A country where the food, fishing and farming industries working closely together and with Government are not dependent on output-related subsidies to produce safe, nutritious food which contributes positively to consumer choice and the health of the whole nation. A place where the land is managed in such a way as to recognise its many functions, from production through to recreation: where we seek to promote biodiversity on land and in our seas, and where the promotion of animal welfare and protection against animal disease is at the core of the way in which we farm and live. The pursuit of sustainable development, environmental, economic and social is achieving this vision."

5.2 We suggest that our submission is entirely consistent with this vision which has a number of strands:

— The concern with sustainability is addressed by our emphasis on trade subsidiarity and reducing global trade in products that can be sourced from within the UK.

— By placing bioregionalism at the heart of our submission we address DEFRA's concern that rural communities should be economically and environmentally viable.

— Our response to the desire to reduce subsidies is the suggestion of a carbon tax, which would automatically increase the price of imported sugar and hence make domestic production more competitive.

5.3 In conclusion, we would suggest to the Committee that DEFRA's vision cannot be addressed without challenging the nature of the globalised economy, which is far from a free market, but rather one dominated by corporate interests. If the power of industrial bodies and the producers' lobby is to be challenged, so must the power of global corporations.

Molly Scott Cato

Centre for Holistic Studies, India, UK Network

September 2005