"East Bohemia and Haná, in Moravia, are the crown jewels of beet growing in Europe," said Zdeněk Joudal, chairman of the Beet Growers Union of Bohemia. Yields are high, better than in most European Union countries.

Yet, as part of dramatic reductions in the European sugar market sought by EU reformers in the face of upcoming foreign competition, Eastern Sugar, one of the country's largest sugar producers, has announced plans to close its three refineries in the Czech Republic and turn its production quotas over to the EU for a large cash reward.

Sugar beet is grown on over 12,000 hectares (29,600 acres) in the Czech Republic. Should Eastern Sugar close, 800 farmers and other employees will lose their jobs, Joudal said. The country would lose a quarter of its production and become a sugar importer for the first time in more than a century.

The company has until the end of January to finalize its plans.

"Eastern Sugar's decision amounts to the liquidation of beet growing in the Czech Republic," said Josef Hlavinka, a private beet farmer from Brodek, north Moravia.

Hugo Roldán, spokesman for the Agriculture Ministry, said the goal of the EU's sugar reforms is being lost.

"We are witnessing the reduction of sugar beet production in one of the more suitable regions of Europe," he said. "The target of the reform is to reduce this production only in less suitable areas, like the north and south of Europe."

The Agrarian Chamber (AK) announced Dec. 1 that Eastern Sugar made a profit of 61.1 million Kč ($2.9 million) profit in its last fiscal year.

"There are no economic reasons behind the company's decision," said Jan Veleba, the chamber president. "This is why, in cooperation with our lawyers, we are considering bringing this case to the European Court of Justice."

Earlier the same week, Nov. 28, the Agriculture Ministry announced that Eastern Sugar would give Czech beet farmers and machinists 29.3 percent of the money the company would earn for turning in its production quotas — 730 euros ($960/20,400 Kč) per metric ton (1.1 short ton), or 74.5 million euros total.

The company had sought to give farmers only 12 percent of its take, slightly above the EU-dictated floor of 10 percent.

Eastern Sugar has declined all offers from other Czech companies to purchase its quotas.

Cukrovary TTD, the country's largest sugar producer, said it would be interested in such a sale, as it recently announced plans to invest 1.5 billion to 2 billion Kč in the production of bioethanol and the purchase of beet quotas.

Eastern Sugar declined to comment, referring all queries to a notice it released in October that cited the unpromising economic future for European sugar production in general as a reason for its restructuring.

Czech farms that currently supply Eastern Sugar, however, will have no problem staying afloat, buoyed by direct subsidies from the EU as they switch to crops of their choice.

What bothers farmers most is the perceived unfairness of the potential closings. The home countries of Eastern Sugar's owners, the United Kingdom and Germany, together with France, grow over half of Europe's sugar beets and dominate the industry.

"They don't feel like closing plants in France and Germany," said Josef Uchytil, chairman of the Beet Growers Union of Moravia and Silesia. "So they shift the task to new member states like the Czech Republic or Slovakia" — or Poland, which was against the sugar reforms.

International competition

The reforms go back to a World Trade Organization ruling that found the EU's protection of its sugar market illegal: The European price for sugar was three times the global rate. Reform of the market was required, especially after the EU agreed to open its market to the world's 49 poorest countries in 2009, many of which export cheaper cane sugar.

The EU wants to reduce the 17.4 million metric tons of sugar it produces each year by a third. To do so, it cut the guaranteed price of sugar by 36 percent and, over the next three years, is offering financial incentives for unprofitable or unproductive companies to get out of the market. The incentives decrease each year.

Reformers expected that the majority of refinery closures would occur in southern and northern Europe, in countries such as Italy, Spain and Ireland, where the soil and climate are unsuitable for beet farming and yields are low. And, in the first year of the program, the 1.5 million metric tons of beet sugar removed from the market came from these countries — and none from the new member states.

This year, European sugar companies have turned in only 700,000 metric tons of their quotas. The EU had hoped to cut 4.5 million metric tons.

If companies don't take advantage of EU incentives, the European sugar market will "implode," said Michael Mann, EU agriculture spokesman. Production must drop. If not, when the cheap cane sugar arrives, there will be "far too much sugar going around and everyone will be going out of business."