Nov. 22 (Bloomberg) -- Suedzucker AG and other European Union sugar processors won more time to adjust to a proposed 39 percent cut in their prices after Spain, Italy, Ireland and eight other member states threatened to block the original timetable.

The U.K., which is chairing a meeting of agriculture ministers in Brussels this week, and EU Agriculture Commissioner Mariann Fischer Boel proposed doubling a phasing-in period for the price cut to four years from two.

``This council is our last chance to agree an orderly transition to a new sugar regime next year,'' U.K. Agriculture Minister Margaret Beckett told the meeting today, according to a text of her comments. The new proposal ``is a very substantial response to the many concerns which colleagues have raised.''

The proposed changes are the biggest in the history of the four-decade-old policy, which was aimed at securing Europe's food supply after the Second World War. The changes may mean that the EU will move from being the world's second-biggest sugar exporter to a net importer, as unprofitable production closes.

Fischer Boel's proposals are supported by a central ``beet belt'' of the biggest and most efficient producers, in Germany, France, the U.K., Belgium and Denmark.

Eleven member states, including Spain, Italy, Poland, Ireland, Greece, Portugal and Finland, said in a letter to Fischer Boel last month that it would be ``unacceptable to dismantle the production in certain regions and at the same time increase it in others.''

Their votes are enough to block an accord, unless Fischer Boel can persuade them with concessions.

Beet is a cone-shaped plant first cultivated on a large scale in Europe on the orders of Napoleon Bonaparte, to counter the British navy blockade that prevented Caribbean cane sugar from reaching continental ports.

Industrial Users

Industrial sugar users such as Nestle SA and Cadbury Schweppes Plc, which buy 70 percent of the 25-nation bloc's production, say prices are almost three times those on the world market and are costing EU jobs.

``Whatever happens their will be casualties,'' said Hubert Chavanes, leading a protest of about 50 farmers who had parked a trailer of sugar beet outside the meeting of ministers today. ``We think there are at least 100,000 jobs that could be lost.''

The revised proposal demands that sugar factories which close down pay at least 10 percent of the government aid they receive in return to the farmers which supplied them.

For those producers who stay in business, the new proposal offers a limited extension of the EU's system of guaranteed minimum prices until 2010 and a promise that surges in sugar imports will be monitored.

Sugar Market

Suedzucker, with 45 factories in Germany, France, Belgium, Poland, Austria, Romania, the Czech Republic, Slovakia and Moldova, has about 20 percent of the European sugar market.

Theo Spettmann, the company's chief executive, says a winnowing out of the least competitive players is an opportunity to expand market share.

``Our aim is to go into these countries which will have given up on sugar production,'' he said in a Nov. 17 telephone interview from Suedzucker's headquarters in Mannheim, Germany.

Fischer Boel's proposals introduce competition into a market that has enjoyed four decades of protection, said Michael Jack, who heads a U.K. parliamentary committee that recently issued a report on EU sugar.

``The most important thing about the reform package is that it allows, for the first time, natural advantage to decide where production is located,'' he said in an interview in London.

Industrial Tariffs

Fischer Boel has said an agreement this week is essential to strengthen the hand of the EU at next month's meeting of the World Trade Organization in Hong Kong. A group of developing countries led by Brazil, India and China has refused to negotiate industrial tariffs or commercial services until the EU offers better access for their agricultural commodities to its 450 million consumers.

EU protection of its sugar market has come to symbolize the trade-distorting effect of farm subsidies. Brazil, Thailand and Australia have accused the EU of ``dumping'' millions of tons of surplus sugar each year on world markets, where prices are as much as two-thirds below what the EU guarantees to pay its own producers for quota sugar.

The WTO last month gave the EU until May 22 to reduce its sugar exports to no more than 1.27 million metric tons a year.

Tate & Lyle Plc said in written testimony to a U.K. parliamentary hearing that it may close its Silvertown refinery in east London, which dates from 1878, if Fischer Boel's plan goes ahead. It is the world's biggest cane sugar refinery.

The raw cane sugar that Tate & Lyle refines in London comes from 18 former colonies in Africa, Caribbean and the Pacific, with privileged access to the closed EU sugar market.

The ACP group wants the European Commission to pare the proposed price cut to 19 percent from 39 percent, to spread it over eight years and to retain the special ``refining aid'' that's given to Tate & Lyle to compensate for its lower margins compared with beet processors.

To contact the reporters on this story: Peter McGill in London at pmcgill1@bloomberg.net Duncan Hooper in Brussels at dhooper@bloomberg.net.

Last Updated: November 22, 2005 06:41 EST