'Historic' CAP reform praised by Beckett
By Robert Uhlig, Farming Correspondent in Luxembourg
European agriculture ministers yesterday agreed sweeping reforms to the #31 billion Common Agriculture Policy, guaranteeing farmers subsidies until at least 2013 - even if they do not produce food - in return for better food quality and greater environmental care.
After three weeks of tortuous negotiations, agriculture ministers emerged with an "historic" accord that changes 45 years of European agricultural and trade policy.
Instead of a single policy applied across Europe the reforms set minimum requirements for member states to "decouple" the link between farmers' subsidies and the quantity of crops they grow or livestock they keep.
Margaret Beckett, the Agriculture Secretary, a leading proponent of the reforms - drawn up by Franz Fischler, the Agriculture Commissioner, and fiercely resisted by France and Mediterranean countries - said she would decouple all English farmers' subsidies from next January.
Provided they kept their land in "agricultural order", which in some cases would involve little more than trimming the grass and tending hedges, English farmers would be paid a fixed, "single farm payment" no matter how little food they produced.
Welsh and Scottish farmers are likely to follow suit, except in remote areas such as the Highlands and Islands.
Those that produce food will have to meet 18 "cross-compliance" requirements on environmental, animal welfare and food quality standards to receive their payment. Announcing the agreement to the Commons, Mrs Beckett said: "It is hard to overstate the importance of this morning's agreement in transforming the core elements of the CAP and laying down a new direction for its future evolution."
She said breaking the link between farm subsidies and production would "reconnect farmers to their markets" and enable them to "produce for the market, not the subsidy".
Speaking in Luxembourg, Mr Fischler said the reforms would allow Europe to comply with World Trade Organisation demands to end trade-distorting subsidies and reduce wasteful over-production.
For Jacques Chirac, the French president, the agreement was a humiliating defeat after he brought the talks to a standstill before the EU leaders' summit last week by refusing to allow his agriculture minister, Herve Gaymard, to make any concessions.
Yesterday, looking increasingly isolated, M Gaymard signed up to the agreement, which is bitterly resented by French farmers, the largest beneficiaries of CAP payments.
Nevertheless, M Gaymard said: "Taking account of the diversity of the interests at stake, taking account of the harshness of the Commission's initial proposals . . . I think very honestly that this compromise can legitimately give us satisfaction."
To win the backing of all EU states, a compromise was agreed allowing countries or regions to retain a quarter of cereal production subsidies and gives them a choice of various degrees of production subsidy for cattle and sheep.
In a sop to France, Mr Fischler abandoned cuts in minimum cereals prices that Brussels guarantees to farmers, and he allowed countries to delay decoupling until 2007.
To reduce the threat of farmers deserting uneconomic land by taking their entitlement to a single farm payment to agriculturally richer holdings, the Commission introduced compromise measures, including allowing individual nations to redirect up to 10 per cent of CAP payments into a "national envelope" to encourage farming in less favoured areas.
Farmers will also be subject to progressive cuts - modulation - in their payments, from three per cent in 2005 to five per cent in 2007, to pay for rural development schemes.
British farmers will be modulated at a higher rate in accordance with the Government's sustainable farming and food strategy, designed to revitalise the countryside after foot and mouth.
The RSPB described the reforms as "a monumental change that would provide a real benefit to farm wildlife".
Sir Ben Gill, president of the National Farmers' Union, welcomed the changes but said he had concerns about the trade distorting effects of countries applying different decoupling levels at different times.
The Campaign to Protect Rural England said it was "very good news for the character of the English countryside".
But Oxfam said the deal "completely sidesteps the serious problem of dairy dumping by the EU on poor countries".