The sugar sector is small in agricultural sector, occupying 1.5% of the cultivable land area and accounting for approximately 1.2% of agricultural GDP (excluding processing which probably accounts for a further 1%). It does, however, account for 6.5% of all budgetary payments to agriculture, showing its disproportionate dependence on taxpayers' money. Sugar production in Croatia is characterized by high production costs, struggling with a strong competition at the world market. Despite the results of the competitiveness study, in which the DRC calculation showed that sugar production is not internationally competitive, one of the basic characteristics of our foreign trade in sugar till 2003 was high exports. Sharp shift in the EU sugar policy will result in sugar price decrease due to the WTO rules, which will affect the Croatian sugar industry. Therefore, Croatia will have to apply measures for decreasing production costs and increasing production, with the final goal of price decrease for about 20%. For these reasons, it will be necessary to strive for the quota at the level of average production of three Croatian sugar - plants.