BRUSSELS (AFP) — European Union nations sealed agreement on Thursday to revamp their farm support policy with increases in milk quotas, cuts in subsidies for production and more support for eco-friendly projects.
The compromise, the first major overhaul of the EU's controversial Common Agricultural Policy (CAP) for five years, was thrashed out through the night by the bloc's 27 farm ministers during some 18 hours of negotiations in Brussels.
"We have reached a near-unanimous accord," said French Agriculture Minister Michel Barnier, whose country holds the EU's rotating presidency until the end of the year.
But Britain, a strong advocate of radical reform of the system, felt the new measures did not go far enough.
"We were disappointed not to be able to support this package," a British spokesman told AFP.
"We see this as a lost opportunity for the EU to introduce further reforms to the CAP budget at a faster pace," the spokesman added.
Sources said Latvia also opposed the agreement because it wanted additional tinkering with its farm subsidies, compared to other newer members of the EU.
A German spokesman said Germany had almost joined the opposition ranks but had decided that the compromise deal was the best they were likely to get.
"It has not been easy," EU Agriculture Commissioner Mariann Fischer Boel told reporters.
However she added: "We'll be quite fit for the future" with this reform.
The European Commission explained that the French EU presidency had been satisfied that while some opposition to the package remained, not enough countries were opposed to constitute a blocking minority and the changes were therefore not put to a ministerial vote.
The changes expand on the major CAP reforms of 2003, pushing European farmers further into the world of supply and demand with a smaller safety net of subsidies linked to production levels.
The EU's farm handout system has long been an area of heated debate in Brussels and beyond, swallowing up 40 percent of the overall European Union budget.
Another major policy battle looms as the 27 member states are yet to tackle the size of the CAP budget itself, which is fixed up to 2013.
The British and the Scandinavians have already taken up their cudgels on the matter, seeking a substantial reduction of the overall farm subsidy package.
There was agreement Thursday, albeit via majority, on the thorny issue of reducing subsidies directly linked to farm production and switching the funding to projects to protect the environment or revitalise rural areas.
Ministers agreed on overall cuts of 10 percent with large-sized farms that currently receive 300,000 euros per year hit harder than their smaller counterparts.
Thus German farmers will lose some 240 million euros of annual aid, German Farm Minister Ilse Aigner calculated.
There were also tough talks on another key CAP area -- milk quotas.
Some countries, notably Italy, wanted to scrap the quota system immediately in the face of growing global demand. Others wanted it retained, fearing a sharp fall in market prices should the quotas disappear.
The ministers finally agreed to progressively lift milk quotas for farmers by one percent per year before abandoning them entirely in 2015.
"This is a prudent approach" said Barnier, who led the talks on behalf of the French EU presidency and faces a very strong farm lobby at home.
Reluctant nations including France and Germany will be able to use aid targeted at farmers in difficult mountainous regions to ease the transition to ditching the quotas,
Rome was won over by a dispensation allowing it to raise its quotas by a one-off five percent as soon as next year.
The push to scrap or reduce public payments to farmers continued in other areas but not at the speed which the European Commission had originally proposed.
"The global financial crisis demonstrated the need to preserve regulation and governance," including in the CAP, in order "to have a high-producing agricultural sector," said Barnier.
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