The first reforms since the postwar period to the EU’s much criticised sugar regime will cut prices by 36 per cent, destroy 100,000 jobs in Europe, end sugar farming in countries such as Ireland and Greece, and lead to economic devastation for Europe’s former colonies in Africa and the Caribbean, which also benefited from the rigged market.

However, the dismantling of the last fully centrally controlled agricultural regime will strengthen Europe’s hands in the Doha Round of the world trade talks, which reach a climax at a summit in Hong Kong next month. As well as European consumers and taxpayers, the reforms will also benefit efficient sugar producers such as Brazil, Thailand and Australia, who had taken successful legal action against Europe to force it to end its protectionism. It will also help some of the poorest African countries, who will get far better access to the EU market from 2009.

Emerging from three days of arduous and acrimonious negotiations, having had only a few hours’ sleep, Margaret Beckett, the Environment Secretary, who chaired proceedings, declared: “This is a historic day, because the sugar sector had been unreformed for 40 years. After very difficult and detailed negotiations, we now reached agreement on a very radical reform of the EU sugar regimes.”

The talks in Brussels had been dogged by countless demonstrations from sugar farmers around the world, including Europe, who stood to lose from the changes.

Mariann Fischer Boel, the European Agriculture Commissioner, said: “I understand clearly why sugar has not been changed in almost 40 years, because now I know what it is like to enter the hornets’ nest, or the lion’s den.”

Under the reforms, prices will be cut by 36 per cent over the next four years, but the world’s producers will not get free access until 2020. European sugar farmers and processors are being given €7 billion (£4.8billion) in compensation to help them to adjust to the new industries. Former colonies that lose out will be given €40 million next year.

Under the reforms, Ireland will be forced by quota cuts to shut down all its sugar beet production, while Italy will give up half its production quotas.

Official estimates predict that European sugar production will drop by one quarter, and that 90,000 of Europe’s 325,000 sugar workers will lose their jobs. With Europe’s pampered and inefficient farmers largely unable to compete in the global market, the Commission predicts that all sugar exports from Europe will stop, and the EU will turn into a major sugar importer.

The drops in prices and production levels mean that sugar farmers who survive are likely to face a drop in income of two thirds. Poland, Greece and Latvia remained vehemently opposed to the compromise, arguing that the reform was unfair for their producers.

British sugar beet farmers are also under threat, although the reforms are likely to be less of a shock because they are more efficient. Jim Paice, the Shadow Agriculture Minister, said: “The Government must now work with the industry to retain beet production in this country — not out of any sentimentalism but because UK beet growers are among the most efficient in Europe.”

The Common Agricultural Policy kept sugar prices in Europe at more than three times the world level. It led to huge sugar surpluses, which were dumped on the developing world, often undermining local farmers. However, sugar cane farmers in former European colonies, mainly in Africa, had preferential access to the European market, enabling them to sell at well above world rates.

Luis Morago, head of Oxfam in Brussels, said: “Developing countries have been sacrificed for Europe to reach a deal. The Commission has abandoned some of the world’s poorest countries to destitution.”

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