FRANZ FISCHLER, the European Union farm commissioner, is expected to propose radical reforms of the EU sugar regime next month, the Financial Times reports.

According to the paper, Mr Fischler will propose cutting the guaranteed sugar price by one-third between 2005 and 2007 and reduce sugar quotas from 17.4m to 14.6m tonnes a year.

Mr Fischler is also expected to propose that subsidised sugar exports should be reduced from 2.4m to 400,000 tonnes.

The proposals will need to be confirmed by other commissioners and then approved by EU member states.

The FT reports that the overhaul is likely to strengthen the EU‘s position in the current round of global trade negotiations, where Brussels is under pressure to reduce its €43bn (£29bn) farm subsidy regime.

It may also help to avert an embarrassing verdict by the WTO on the EU sugar export regime as a result of a legal challenge brought by Brazil, Australia and Thailand.

A ruling on this issue may come as early as next month, the FT reports, and it may deem parts of the EU export regime illegal.