The European Commission today approved three possible options for the future of EU sugar policy, one of which includes cuts to minimum prices and abolition of national production quotas.
A Commission official said the options paper had been approved by the EU executive at a meeting in Strasbourg.
The options will now be debated by EU member states, which must agree to any major policy changes in the sector. The other two possibilities for sugar are to prolong current policy or go for complete market liberalisation.
The idea of cutting minimum sugar prices, more than three times higher than those on the world market, has already sparked fierce opposition from Europe's sugar processing industry, which would face sharp falls in revenue if this path were chosen.
Industry lobbying of national governments to maintain the status quo is likely to be intense. France and Germany are the EU's leading sugar producers, followed by Italy and Britain.
But the EU faces strong international pressure to overhaul its sugar policy, which has barely changed since its introduction in the late 1960s.
Brazil, Australia and Thailand have filed a suit against the EU's sugar regime in the World Trade Organisation, saying the 15-nation bloc dumps its surplus produce on the world market.