The EU farm Commissioner made concessions today as talks opened to overhaul the union's sugar policy.
Sugar is the last major farm sector in the European Union to undergo serious reform. It was not included in the last farm shake-up that took three weeks to negotiate in 2003.
Seeking to win over a large number of sceptical EU states, Agriculture Commissioner Mariann Fischer Boel said it would be disastrous for the EU to delay reform, especially with the WTO pressing the Union for change as soon as possible.
Brazil and other sugar producers have argued that the subsidies the EU pays for its domestic sugar not only make EU domestic sugar prices among the highest in the world but also distort prices on the world market.
Ms Fischer Boel offered to spread a proposed 39% net cut to minimum support prices over four years, instead of two, starting in July 2007.
The cut in the support price is seen as a possible death knell for sugar production in some EU countries, among them Italy and Ireland.
Compensation for sugar operations hit with lower revenues and wishing to leave the sector would be raised from the second to the fourth years of the reform. These operations would sell their quotas, or part of them, back to Brussels.
The prices paid for surrendered production would start at €730 per tonne of subsidy-eligible quota sold back in the first year, falling to €520 by the fourth.
The Irish Farmers' Association, which held a rally in support of the Irish sugar beet sector in Mallow on Sunday night, has warned that the reforms would have a disastrous effect on Irish growers who are already reeling from the closure of the Greencore sugar plant in Carlow.
The IFA estimates the industry to be worth €75 million annually, and says the reforms could wipe it out.
The IFA has said that, on the contrary, the Minister for Agriculture, Mary Coughlan, should not give an inch.
But there is a further pressure on ministers to reach agreement on reform.
Although this issue is not technically linked to the world trade negotiations in Hong Kong in December, EU Trade Commissioner Peter Mandelson knows that unless reform of the sugar sector is agreed this week, he will have one less chunk of goodwill from his opponents going into those negotiations.
