Helsinki, Dec. 18 - Finnish sugar beet producers associations MTK and SLC and sugar company Sucros agreed on Tuesday on sugar production terms for the next seven years, the parties said in a joint statement.
The agreement includes transportation costs and distribution of potential profits to farmers.
Sugar production will move closer to Sakyla mill in southwestern Finland, but giving up sugar beet will be voluntary for farmers.
In September, the European Union (EU) revised its sugar reform to cut oversupply. It offered farmers financial incentives to sell their subsidy-eligible quotas to Bussels and warned sugar companies it would impose one-off cuts in 2010 if not enough supply has been removed before then.
"This is a sector agreement and those 1,500 farmers will approve it by making a deal with the sugar mill," said Pekka Myllymaki, chairman of the national sugar beet committee.
Myllymaki added farmers were expected to make up their minds by mid-January.
Sakyla mill is the only sugar plant in Finland and produces on average 75,000 tonnes of sugar per year. Danish sugar group Danisco owns 80 percent of the plant and Finnish food and feed company Lannen Tehtaat has 20 percent stake.