The European Union is expected to offer nearly 5 million U.S. dollars to Fiji next year to assist in creating a national adaptation strategy for sugar.
The EU is phasing out a system of preferential pricing for imported sugar from Fiji and 17 other sugar protocol countries from September next year.
But, it is providing some funds to adjust to the different market conditions.
The trade counsellor at the E.C. commission delegation for the Pacific, Myfanwy Vandevelde, says they believe there are three broad areas in Fiji which needs assistance.
These include increasing the competitiveness of the sugar industry, developing other income generating areas in agriculture and easing the social impact of the loss of revenue.
Ms Vandevelde says the EU assistance will go some towards helping.
"It doesn't compensate for the loss but we hope that it will nevertheless be significant in helping Fiji to adapt to another sort of economy because I don't think there are many people who believe that the sugar economy in Fiji is sustainable at its present level."
Mrs Vandevelde says there will be an initial five percent cut in prices, which will then remain steady until the end of 2008 but by 2010, there will be a total reduction of 36 percent.