GEORGETOWN, Guyana (AP) -- The European Union has agreed to provide nearly $27 million in aid to help boost and diversify sugar production in Guyana, the Caribbean region's largest sugar exporter.

The money is aimed at compensating for losses stemming from an earlier EU decision to cut import prices for raw sugar by up to 36 percent, the EU said in a statement late Tuesday. Caribbean trade bloc nations have said the move costs them $100 million annually.

The South American country also expects to receive an additional $106 million through 2013 from the EU to further support its sugar industry.

The EU said it wants to see Guyana diversify production to include packaged sugars, upgrade factories dating back to the British colonial era and encourage private farmers to cultivate land and sell cane to the state-run Guyana Sugar Corporation.

Guysuco is the largest bloc producer to Europe, but labor strikes and unseasonable weather last year led to the lowest production in a decade of only 219,000 tons (199,000 metric tons).

Copyright 2011 The AP.