Sugar prices in the European Union(EU) will fall by 36 percent over the next four years, under a landmark deal reached by EU agriculture ministers on Thursday.

After three days of hard bargaining, ministers from 25 EU member states reached a compromise over the drastic reform plan which seeks to end almost 40 years of protectionism for EU sugar farmers. The EU's executive European Commission initially proposed 39 percent price cut.

According to Thursday's informal deal, EU sugar farmers will be compensated for 64.2 percent of their losses and have direct access to a 7.5-billion-euro restructuring fund.

The European Commission also agreed to monitor sugar imports to make sure overseas sugar products do not flood Europe suddenly.

The EU's decision-making council is expected to officially adopt the deal in early 2006 after the European Parliament issues its non-binding opinion in January. Officials said no big changes are expected to be made on Thursday's agreement.

EU Agriculture Commissioner Mariann Fischer Boel said the new sugar agreement "complies completely" with rules of the World Trade Organization (WTO).

"I know I'll be in a much better position for the negotiations in December," she said, referring to next month's WTO ministerial conference in Hong Kong.

The WTO had declared the current European sugar aid system illegal and gave Brussels until May 2006 to bring its policy into line.

EU trade commissioner Peter Mandelson said the deal sends out a positive political message ahead of the Hong Kong meeting.

"The deal is good news for Hong Kong. It removes a cloud and Europe has made an important contribution in getting this out of the way," he said.

Source: Xinhua