We visited Hrebenne, a small rural village at the Polish-Ukrainian border, on the day the expansion of the European Union went into effect. While we observed the growing queue of cars on both sides of the border, we spoke to a Polish farmer. He offered us homemade sausages and coffee. When he handed us the sugar, he joked that the Polish cukier had become twice as sweet since their entry into the European Union. The price had multiplied from one day to the next. As a result, Polish sugar was now even cheaper in the Ukraine than in Poland itself. This market miracle is also called the 47th-Street-photo-phenomenon named after a street in Manhattan where Japanese camera’s are sold at a lower price than in Japan. How does this phenomenon work? Europe protects her sugarbeet growers against the instability of the international commodities market with a tariff wall, keeping out foreign competitors. Within the European trade block, the sugar market is consolidated with a fixed intervention price that is several times higher than the world market price. Surplus sugar is unloaded onto the world market with additional export restitution.
Artist/Author: Lonnie van Brummelen / Siebren de Haan
What legitimizes intervention of the state? European farmers point to the inflexibility of agriculture, with its slow production and dependence on the weather. They stress Europe’s high demands in environmental and labour protection, which foreign producers rarely have to deal with. Since sugarbeets produce four times more oxygen per hectare than forests do, their cultivation makes an important contribution to the compensation of carbon dioxide emissions. In the future, when we run out of fossil fuels, sugar could play an important role in the alternative energy market in the form of raw material for bio-ethanol, and it would not be strategic to depend on foreign producers. Nevertheless, the World Trade Organization condemned the European sugar politics as unfair competition, or dumping.