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M.R. Subramani

CHENNAI, April 6

THE Government is pressing the European Union to open its sugar quota and allow import of at least one lakh tonnes of the commodity into its member-countries.

``The Union Agriculture Minister, Mr Ajit Singh, has made this demand to the EU Trade Commissioner, Mr Pascal Lamy, when the latter visited the country recently and sought support for EU stand on World Trade Organisation (WTO) Agreement on Agriculture,'' informed sources told Business Line.

``The EU, particularly, wants India to appreciate its stand on the high subsidies it offers to its farmers. When Mr Singh raised the issue of sugar quota, Mr Lamy promised that it will be considered when the sugar quota comes up for revision during June-July this year,'' the sources said.

It was in this context that the EU came up with the proposal of bartering aircraft for Indian sugar. Both Indian Airlines and Air India have plans to buy aircraft to strengthen their fleet. Airbus Industrie of France, an influential member of EU, is one of the strong contenders for the deal. Currently, the plans have been put off.

When contacted, Mr S.L. Jain, Director-General, Indian Sugar Mills' Association, said the EU was under pressure to cut its subsidies as well open up its sugar market and India was the prime force behind it.

``We had formed a Global Alliance for Sugar (GAS) to tackle the issue of high subsidies by the developed nations and had also joined hands with the Cairns group. It has begun to pay dividends now,'' he said.

The GAS is a body of sugar-producing nations such as India, Brazil, Thailand and Central American countries, while the Cairns Group comprises countries such as Australia, Canada, New Zealand that are primarily depend on agricultural and dairy exports.

According to Mr Jain, GAS played a major role during the WTO Ministerial Round meeting in Doha, Qatar.

Currently, EU allows import of 10,000 tonnes of sugar only from India. This, according to Mr Jain, is a far cry from the 25,000 tonnes that it allowed before 1980. ``Then the State Trading Corporation defaulted and our production then was nowhere near what it is now. After much protest from our Government, EU revived the import quota but allowed only 10,000 tonnes,'' he said.

Meanwhile, during 1997-98 after much haggling, the Indian Sugar Exim Corporation (ISEC), a joint trading body of the private and cooperative sugar mills in the country, was able to get a 10,000 tonnes Special Price Quota to export to EU.

``Even for executing this quota, the industry had to sign a document with the Government,'' Mr Jain said.

Currently, EU gives preference in sugar quota to African, Caribbean and Pacific countries such as Swaziland, Fiji and Mauritius.

``Mauritius has a quota to export five lakh tonnes and it does not even produce to meet its own demand. But it ensures that its quota does not lapse,'' Mr Jain said, adding that the entire economy of these countries depended on the quotas.

Asked if EU would enhance the quota for India, Mr Jain said: ``It should. There is a good possibility.''

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