Main points of EU farm reform proposals

(BRUSSELS) - The European Commission unveiled on Tuesday a package of proposals aimed at lifting farm production in the face of soaring food prices.

The following are the main points from the proposals, which member states and the European Parliament are due to consider under France's EU presidency in the second half of the year.

Fallow land requirement:

The commission proposes to get rid of a requirement for farmers to leave 10 percent of their fields fallow for a year in order to make more land available for production.

Phasing out milk quotas:

Under the proposals, milk quotas would be phased out by April 2015 with five annual quota increases of one percent starting in the 2009/10 season.

Farm subsidies:

The commission wants to extend the principle of decoupling whereby the amount of subsidies a farmer gets is not linked to how much is produced with the exception of suckler cows, goats and sheep.

The commission also wants to simplify the environmental, animal welfare and food quality conditions farmers have to satisfy to receive subsidies by dropping irrelevant standards and those which farmers have no control over.

Member states would also be given the possibility of forgoing subsidy payments to companies which are not primarily in the farming business, such as banks that owns lots of farmland and currently receive such aid.

Rural development:

While not seeking new budget revenues, the commission proposals would shift more money from farm subsidies to rural development projects by siphoning more money off what the biggest farms receive.

Farms receiving over 5,000 euros in direct aid would see 13 percent of their payments by 2012 reduced to pay for rural development from five percent currently. Bigger farms receiving more aid would face even bigger cuts.

Market intervention:

The commission would put an end to so-called market intervention for durum wheat, rice and pig meat, whereby authorities buy up those products when prices fall to levels deemed to be too low.

Scrapping biofuel subsidy:

The proposals would also scrap in 2010 a 45 euro per hectare subsidy paid to farmers for growing crops used to make biofuels, which are losing favour over fears they help drive food prices higher by using up land that could otherwise support food crops.