European Union agriculture ministers reached a landmark deal on Thursday to reform the bloc's subsidy-laden sugar policy, agreeing a 36 percent cut in support prices over four years, a senior EU official said.
"The deal is done, with a 36 percent price cut," the official told Reuters after a three-day negotiating marathon on the most unreformed area of European agriculture.
In a key part of the deal, farmers wishing to abandon beet growing would be paid basic compensation equivalent to 64.2 percent of the revenues they lose due to the price cuts, the official said.
EU sugar policy has survived virtually all attempts at reform since its birth in the late 1960s and is often attacked for harming Third World producers as it encourages millions of tonnes of EU sugar to flow onto world markets, lowering prices.
The World Trade Organisation had declared the system illegal and told the EU to bring its policy into line by May 2006, after a case brought by big exporters Brazil, Australia and Thailand.
European Agriculture Commissioner Mariann Fischer Boel had proposed a 39 percent cut to the EU's support price for sugar.
The executive European Commission was keen to get a reform deal before a meeting next month in Hong Kong of the WTO's 148 members to discuss a new global trade round.