Developing countries yesterday accused the EU of proposing "disastrous" reforms to its sugar regime which would bring a 37% cut in their prices and put vulnerable economies and hundreds of thousands of jobs at risk.
The charge came after heated talks involving the European commission and Luxembourg ministers, representing the EU's council of ministers, with African, Caribbean and Pacific (ACP) and other less developed countries (LDCs) over "necessary and inevitable" reforms.
Amid accusations that the EU had hijacked the negotiations, Nandcoomar Bodha, the Mauritian agriculture minister, said the price cuts and three-year transition period proposed by Brussels were "unbearable" and would "cripple" ACP sugar industries.
LDC ministers said the reforms would cost LDCs an estimated €255m (£177m) a year in income, but Louis Michel, the EU development commissioner, refusing to confirm this estimate, insisted that Brussels would provide financial support over eight years to cushion the change.
Mr Michel, flanked by Peter Mandelson, the EU trade commissioner, and Mariann Fischer Boel, the agriculture commissioner, ruled out direct compensation and hinted that the unspecified support could go directly to LDC state budgets.
It will begin next year, but its scale thereafter cannot be given because the EU has yet to agree its own budget for the period 2007-2013, and commissioners are at loggerheads over which of their departments should have to fund the support.
"There's a political commitment to meet a certain number of worries," Mr Michel said.
The EU is in the throes of a World Trade Organisation dispute with countries led by Brazil which is due to be ruled upon in April. It has proposed slashing subsidies to its own producers and ending quotas for largely ACP countries which will continue to be given preferential access to its market.
Senior officials said the effect would be to cut prevailing EU prices from three times the world's average to twice its level, and Mr Mandelson said the current system was no longer tenable.
"Reform is necessary, cannot be put off and should not be watered down," he told ACP ministers.
He added: "The whole point of the reform approach is to ensure that LDCs which are more competitive will benefit from the reform and I believe they will; those which are less competitive will lose, I accept, once the quotas are gone."
Ms Fischer Boel, pointing out that the sugar regime had not been reformed in 40 years, said: "This will not be a sweet discussion; it will be tough but the status quo is not sustainable."
Mr Bodha said ACP countries needed a core sugar industry to sustain their economies and democracies, while Oxfam said the EU price cuts would have a devastating impact, with 32,000 job losses in Jamaica and 20,000 in Trinidad alone.
