EU agrees sugar subsidies cut

A reduction in subsidies for Europe 's sugar farmers has been agreed by European Union agriculture ministers.

They have agreed to cut the prices offered to European sugar farmers by 36%, over the next 4 years bringing the EU's sugar rules into line with global frameworks.

In a key part of the deal, farmers wishing to abandon beet growing would be paid basic compensation equivalent to 64.2%  of the revenues they lose due to the price cuts, the official said

The changes were demanded by the World Trade Organisation, but EU farmers and sugar firms have warned of job losses.

The EU had been paying Europe 's sugar producers three times the world price.

A spokeswoman from the EU's presidency said a 'deal has been done' after 'a large qualified majority' of the ministers had signed on to the proposed reform brokered by the presidency and the European Commission.

Change was demanded of the EU after the WTO ruled earlier this year that its existing 40-year-old guaranteed pricing system was illegal.

The WTO's judgement followed a formal complaint from Australia , Brazil and Thailand .

At present, the EU pays about 1.5bn euros annually to support the sugar sector.

"'After a difficult and detailed negotiation, we have now reached agreement on a radical reform of the EU sugar sector," said UK Agriculture Minister Margaret Beckett  at a news conference.

EU agriculture commissioner Mariann Fischer Boel said the commission will now be in a better bargaining position going into WTO ministerial talks in Hong Kong next month.