Europe cancels Fiji sugar grant package

The European Commission has cancelled a grant designed to help Fiji's ailing sugar industry, because the military government has failed to provide a date for elections this year.

The 24 million euro ($F70 million) grant is part of a package to help reform the industry, which is seen as inefficient but has been a major contributor to Fiji's economy.

The commission has taken similar action taken during the past two years.

The EU Commissioner for development and humanitarian aid says the finance was subject to a legitimate government being in place in 2009.

In 2007, Fiji's military leader, Commodore Frank Bainimarama, promised to hold elections by March of this year but now says elections will not be held before 2014.

Sugar is an important source of grassroots income and foreign exchange for Fiji, with about 31% of the Pacific country's population reliant on the industry for their livelihoods.

High prices paid by the commission to counter the fall in the price of sugar sold to the European Union amid industry reform has helped keep Fiji's industry competitive.