Developing sugar industry

The national and international sugar markets are determined by massive government intervention. With high tariffs and other protectionist measures, most of the sugar producing countries protect their own markets from the world market in order to increase or even enable their own domestic sugar production. Domestic producers can therefore achieve prices above world market level. This applies equally to the most important industrialised countries as to developing countries. Thus India, China, the US and Japan are broadly or totally self-sufficient; and the European Union is one of the largest exporters. There is also massive intervention on the national market of less important sugar-producing countries. Very few countries expose their sugar trade to the "free" market.

In Thailand sugar has provided farmers with a good and stable income for a number of years. Sugar is produced mainly by small farmers (the average farm size being about 6.2 hectares) and since the 1960s cane growers' associations have represented their interests with considerable force. Since 1970, the growers' associations have negotiated a fixed price for each season's crop with the cane millers, and in 1984, an Act of Parliament ensured that the annual revenue from total sugar sales was shared between farmers and millers in a ratio of 70:30. Thai farmers have also benefited from the fact that the industry as a whole has greatly increased both production and export since the early 1980s. By the late 1980s, Thailand had become the world's third largest exporter. Favourable physical conditions, climate, and fertile soil, and a modern low-cost processing industry are the main reasons for the industry's success.