BRUSSELS, Belgium (AFP) – EU farm ministers agreed yesterday to a “radical” reform of their sugar sector after a sweetened set of proposals broke a deadlock that had consumed three days of haggling.

The reform package, which goes into effect in 2006, was approved after the proposed cut in the guaranteed price was reduced to 36 per cent rather than 39 per cent in a previous set of proposals.

“After very difficult and detailed negotiations we have now reachedan agreement on a very radical reform of the EU sugar regime,” said British farm minister Margaret Beckett, whose country holds the European Union’s rotating presidency and who brokered the deal.

“This is a historic day, because the sugar sector has been unreformed for 40 years,” a triumphant Beckett told a news conference.

The EU had little choice other than to make broad reforms to its sector regime after the World Trade Organisation (WTO) ruled it illegal earlier this year following a complaint from Australia, Brazil and Thailand.

Amid fierce resistance to the overhaul from some member states, EU countries struggled to agree on how to go about reforming the sector in a way that caused the least pain to their farmers and refiners.

EU farm commissioner Mariann Fischer Boel, who helped Beckett negotiate the deal, was delighted that some member states’ reluctance had been overcome.

“I understand clearly why sugar has not been changed in almost 40 years, because now I know what it’s like to enter the hornets’ nest, or the lion’s den,” she said.

At the moment, the EU offers a guaranteed price for sugar that is paid for, in effect, by consumers, with Brussels buying from producers at about three times the average world market price.

Under the agreed package, the guaranteed price will be cut gradually over four years, during which the producers will benefit from aid to soften the blow.

The sector will benefit from 6.3 billion euros ($7.4 billion) over the four years from a special fund that is to be set up, a senior French agriculture ministry official said.

The package includes plans to compensate for up to 64.2 per cent on average of the loss in EU sugar farmers’ income caused by the reform as well as other aid to help adapt or shut down.

The reform is broadly expected to drive the least competitive EU sugar producers out of business.

The ministers were under pressure to sign on to a deal because the reform would strengthen the EU’s hand in crunch trade negotiations ahead of a mid-December Hong Kong ministerial meeting of the WTO.

Amid broad criticism of Brussels for not making bigger concessions on agriculture ahead of the summit, Boel was relieved that she would be able to face the EU’s trade partners there with the sugar reform “in the pocket”.

“I know that I will be in a much better position for the negotiations in December”, she said.

But Europe’s beet farmers are outraged about the reform and protestors braved freezing temperatures outside the building where the talks were taking place, for the third day running.

The reform package offers 40 million euros to ACP producers in 2006 to help them adapt to the lower guaranteed price, which charities WWF and Oxfam warned in a joint statement would be drastically inadequate.

“The (European) Commission has hurled money at its member states to convince them to sign up but has abandoned some of the world’s poorest countries to destitution,” said the head of Oxfam’s Brussels office, Luis Morago.

“In a year that was meant to focus on Africa and just days before the WTO ministerial in Hong Kong, this is a particularly bitter blow especially when the European Union is apparently pushing a pro-development deal,” he added.