EU agriculture ministers approve watered-down CAP reforms

EU Farm ministers have approved a compromise deal to reform the common agricultural policy. The agreement was welcomed by EU Farm Commissioner Franz Fischler as the start of a new era. Speaking after overnight talks in Luxembourg he said: "I'm sure that agriculture will change as a result of this new rule. Europe has adopted a new, efficient agricultural policy. Above all, a large part of the direct payments will no longer be linked to production." That link, in the form of subsidies, is widely blamed for encouraging massive overproduction. EU farm spending swallows nearly half the union's entire annual budget of almost 100 billion euros. In a gesture towards France, one of the biggest beneficiaries, Fischler abandoned the idea of a five percent cut in the price of key cereals. Breaking the subsidy/production link in cereals will begin in 2005 with an option to delay implementation until 2007. For livestock, member states will have a choice over which individual payments they wish to keep linked to the number of animals on the land. Agreement on reforming the CAP was seen as essential ahead of World Trade Organisation talks, which resume in Mexico in September.