The Fiji Sugar Cane Growers Council says the country could face extreme poverty if the European Union further reduces the highly preferential price it pays for the country's sugar.
Fiji's minister for foreign affairs and trade, Kaliopate Tavola, has indicated that the EU could cut the price it pays to Fiji, African, Carribean and Pacific sugar producers by up to 37% from next year.
The Cane Growers Council says the industry was not expecting subsidies to be cut until 2007.
The CEO of the council, Jaganath Sami, predicts the industry would shrink further because cane farmers on marginal land, with poor soil and low yields, could not survive.
He says this would devastate Fiji's rural sector.
"There are eight sugar towns that are directly dependant on the sugar industry. So you could say over two thirds of Fiji could be pushed into poverty and end up in ghost towns if sugar should suddenly become not viable."
Mr Sami says the industry is already struggling because production costs are higher than the world market price for sugar.