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Fiji: EU cancels 2009 sugar subsidy

The European Union announced that it was suspending 2009 payment of 24 million Euro in subsidies to help prop up Fiji’s sugar industry.

European Commissioner for Development and Humanitarian Aid, Louis Michel, admitted Fiji would have received the payment if it would have had a “legitimate government” in place.

He was referring to the events that began on December 2006 when Commodore Frank Bainimarama dissolved Parliament and overthrew the government of Laisenia Qarase, which he called corrupt and racially divisive. It marked Fiji's fourth military coup since 1987. On April 9, 2009 three judges ruled that Bainimarama had come to power illegally and directed the military leader to step down and the country’s President to appoint a caretaker regime to guide Fiji to elections. However, the President claimed the constitution did not provide him with that power, so he abrogated the document, reappointed the Bainimarma government and provided it with a five-year mandate, promising elections in 2014.

Sugar has a longer history. 130 years ago, British colonial rulers first brought Indians to Fiji to work in the country’s sugar plantations. While its status has declined in the past two decades, Fiji’s sugar industry has been a backbone of Fiji’s economy for the past century. It contributes to roughly seven percent of the country’s GDP, brings in a large amount of foreign earnings and directly supports a quarter of the population. Not to mention that people in Fiji consume sugar at twice the world average.

However, critics maintain, the cost of sugar production in Fiji has increased over the years, while yields and quality have declined. Because the predominately Indo-Fijian cane farmers work on land owned by ethnic Fijians, land issues are highly politicized and take on a racial dimension.

The EU money would have come from a fund for the export sectors of former European colonies to become more globally competitive. The funds are also meant to off-set World Trade Organization-mandated reforms that blocks the EU from buying sugar (and other commodities) on a preference-based quota system, paying former colonies a higher price for its exports.

Coup Four And A Half points out, Fiji’s government broke some of the 12 commitments it made with the EU in April 2007.

The interim regime, in consultation with the three senior interim ministers, agreed to the following commitments:

- Free and fair elections to be held within 24 months from March 2007, meaning elections are to be held by March 2009 subject to the findings of the assessment to be carried out by the independent auditors appointed by the Pacific Islands Forum Secretariat.

- Interim Regime to have consultations with the civil society and relevant stakeholders when adopting major legislative, fiscal and other policy initiatives.

- Interim Regime to use best endeavours to prevent statements by security agencies designed to intimidate.

- Interim Regime to uphold the Constitution and guarantee normal and independent functioning of Constitutional institutions such as the Fiji Human Rights Commission, Public Service Commission, Constitutional Offices Commission, as well as preserve the substantial independence and functioning of the Great Council of Chiefs.

- Interim Regime to fully respect the independence of the judiciary, appoint a Tribunal by 15th July 2007 to preside over the hearing of suspended Chief Justice Daniel Fatiaki, appointment and dismissal of judges to conform to Constitution, and no interference whatsoever by the military, police or the regime with the judicial process including full respect for the legal profession

- All criminal proceedings linked to corruption to be dealt with through appropriate judicial channels and that any other set up to investigate alleged cases of corruption should operate within constitutional boundaries.

- Interim Regime to ensure all cases of alleged human rights infringements are investigated and dealt with in accordance with the various procedures and forums under laws of Fiji.

- Interim Regime to lift the Public Emergency Regulations in May 2007 subject to any threats to national security, public order and safety.

- Freedom of expression and freedom of the media in all its forms are fully respected as provided in the Constitution.

- Interim Regime to maintain regular dialogue to allow verification of progress made and to give EU/EC authorities full access to information on all matters linked to human rights, peaceful restoration of democracy and the rule of law in Fiji.

- Interim Regime to cooperate fully with eventual missions from the EU and EC for assessment and monitoring progress.

- Interim Regime to send progress reports every three months starting 30th June 2007 regarding the essential elements of the Cotonou Agreement and the commitments.

The blog also reported that some media in Fiji was barred from reporting on the loss in aid because of the Public Emergency Regulations that went into effect after the abrogation of the constitution and were recently renewed for another 30 days.

Fiji TV, the Fiji Times and the Indian newspaper, Shanti Dut, were banned from reporting the cancellation of more than 70 million dollars of European Union aid to cane farmers.

The aid money was the allocation earmarked for 2009 to help cane farmers overcome declining sugar prices.

Many who subscribe to Fiji Television news headlines received a notification on their mobile phones saying the 6pm news would feature the EU story.

But the story failed to appear – the bulletin instead went with the appointment of Pita Wise as permanent secretary in the interim Prime Minister’s office as its lead.

We have been told the EU aid money story, was removed at the order of the Ministry of Information censors.

The Daily Post, Fijivillage and the government-owned Fiji Broadcasting Corporation were able to evade censors and run the story.

A post by corruptionfighter99 at Raw Fiji News contends that Mahendra Chaudhry, the country’s first Indo-Fijian Prime Minister who was taken hostage on May 19, 2000 by Fijian nationalists and soldiers and later joined the military backed regime of Commodore Frank Bainimarama may have lost some of his support in the country’s largely Indo-Fijian sugar belt.

With the sugar industry facing collapse, it looks like sugar politics are about to change.
In the past, if Mahendra Chaudhry made a claim about the sugar industry, his loyal followers always believed him, regardless of what his opponents may say. Whether it’s the National Federation Party or the SDL, Chaudhry has been able to dismiss any statement they make.
But this time it’s going to be different. The EU price for sugar has already dropped but the biggest drop in price kicks in later this year, 2009/2010. Farmers payments are going to shrink, even after the devaluation boosts the number of shrunken Fiji dollars they receive.
The EU Reference Price for white sugar falls from 541 Euros in 2008/2009 to 404.4 Euros in 2009/2010. If we count the 08/09 price in pre devaluation dollars it was about $1190. The 09/10 price, even in post devaluation dollars is only $1068. But the cost of fuel and fertilizer are rising fast
because of the devaluation.
The EU promised aid because they knew that many farmers would go broke with the new price for sugar. The aid is supposed to help farmers adapt by helping them to move into new industries and assisting larger more efficient farmers to takeover unviable farms.
Without the aid, many farmers will go broke. They will walk away from their farms with nothing to show for generations of hard work.
No doubt Mahendra Chaudhry will blame [Ousted Fijian nationalist Prime Minister Laisenia] Qarase for all the problems. But this time around, the Chaudhry magic has gone.

Arvinesh Chand, writing in Fiji Today, says the government is washing its hands of ‘big sugar.’

Fiji Broadcasting Reports “Minister for Primary Industries Joketani Cokanasiga says farmers should not be disheartened by the withdrawal of the European Union aid for sugar but only take it as a challenge to open up untold opportunities.”
This is the third statement in recent days that suggests that the Government sees sugar as a historical crop and is quietly stepping away from support in favor of other crops.
Cokanasiga explains that their role is to advise the Fiji Sugar Corporation on how farmers could adjust by diversifying into planting other crops to maintain their livelihood.
He adds that the Legalega Research Station in Nadi is working very closely with farmers to establish demonstration plots in order to transfer technologies researched at the station for the benefit of the farmers.
The research station is advising farmers not to only rely on the income from their sugarcane
farms but to also grow short term cash crops and raise livestock within their farming systems.

The day the EU announced its decision, Fiji’s Prime Minister Frank Bainimarama left for a conference regarding sugar with other members of the ACP, African, Caribbean and Pacific Group of States. In his remarks, he thanked the EU for past aid and warned without continuation of EU trade preferences, Fiji may not be able to make needed reforms to its sugar cane industry.

From Fiji Today.

No News Agency other than Fiji reported the speech. The final report from the conference doesn’t even mention Fiji’s problems with the EU. There was consternation that Fiji was trying to involve the conference in Fiji’s spat with the EU and a concerted effort was made to avoid politics and deal with the EU at a non political level.

A New Zealand-based blog, Fiji: The Way It Was, Is and Can Be, looks at how the regional actors are reacting toward Fiji.

The [EU] announcement came as PM Bainimarama, unaware of the announcement, left to attend a ACP (Asia-Caribbean-Pacific) ministerial conference on Sugar in Guyana, South America. Before leaving, the PM said he knows Australia and NZ are pushing hard to ensure Fiji is not assisted by the EU, the United Nations, the Commonwealth and the Asian Development Bank.

Australia, NZ and the US are reported to be talking about “targeted sanctions.” Nearly one person in three in Fiji is involved in some way in the sugar industry. It is hoped the Australian, NZ and US aim will be more accurate than the Europeans — or there will be no one left to aim at. I doubt any of them would try the same tactics on China.

In a similar vein, Café Pacific argues the EU’s fund freeze will only push Fiji deeper into the arms of China.

While the politicos and media flacks in New Zealand and Australia are rubbing their hypocritical hands with glee, cane growers are wondering how to survive. Now that the European Union has confirmed it will not be paying the 2009 sugar allocation for sugar industry reform (worth more than $US30 million) for the second year running, it is a matter of looking to Plan B. The EU has blocked the sugar assistance because of the military-backed regime’s refusal to return the country to democratic rule (until 2014).

When the funds were first suspended, Fiji was found to have breached the Cotonou agreement between the EU and the ACP bloc of countries (Africa, Caribbean and Pacific). Speculation was rife about whether Fiji regime censorship would gag this story, but it has at least slipped past the censors on Fijivillage News and Fiji Daily Post websites. Fijivillage added that it had been told that regime leader Voreqe Bainimarama said – before flying out to sugar meetings in Guyana and Brussels – that the governments of Australia and NZ were “trying to collapse the Fiji economy”.

Sabotage in other words. And yet another relentless push into railroading Fiji further into the arms of China and chequebook diplomacy. Chinese aid to Fiji has soared after the December coup – from $US23 million in 2006 to $US160 million in 2007 and still climbing.

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