Bring back sweet subsidy

BELGRADE (Reuters) – Serbia’s trade minister said on Saturday the government had found no sign that the country’s sugar refiners had abused a European Union export scheme and that he hoped it would be restored after a three-month suspension. Brussels has put a temporary stop on the scheme for Serbia and Montenegro after claiming to have detected a scam involving fraudulent exports to the EU. Suspicions have been rife that some dealers have sold sugar to the EU at around $600 per ton, by re-exporting material bought on world markets at around $200. But the minister, Slobodan Milosavljevic, was quoted by the Beta news agency on Saturday as saying, «Out of 95 percent of sugar plants’ export deals examined so far, no abuses of the extended preferences have been found.» The EU introduced a special scheme in 2001 to help economic reconstruction under which western Balkan countries can export their sugar production to the EU free of duties and quotas. Milosavljevic said he believe the suspension was not imposed because of the origin of the sugar coming onto the EU market from Serbia, but because of large quantities involved. Since last September, Serbia has exported 180,000 tons of sugar to the EU while Serbia’s sugar plants had produced 250,000 tons, he said. Monthly domestic needs are estimated at 20,000 tons. «This data show that sugar plants in Serbia had an interest in importing sugar from sugar cane and selling it on the domestic market, and exporting to the EU sugar from sugar beet for double the price,» Milosavljevic said. He said a government commission would continue to monitor the sugar trade and that special measures had entered into effect to control the trade, such as giving EU certificates directly to sugar factories and imposing special taxes on sugar imports. Miodrag Kostic, head of MK Commerce which owns three of Serbia’s eight operating plants, said his company had not broken any sugar export regulations. «The European Commission decision will have enormously negative consequences for the state, the sugar factories, and the business partners from Italy and Greece who own several sugar plants in Serbia, but the hardest consequences will be felt by the farmers,» Kostic told Reuters. The government had agreed to subsidize the planting of 70,000 hectares (169,000 acres) to beet this year and farmers had planted 95,000 hectares, up 64 percent on 2002.