(ANNECY) - European agriculture ministers were as divided as ever over EU farming subsidies on Tuesday, with France and Britain championing opposing views on future spending.

"We are not all in agreement as to what needs to be done," French Farm Minister Michel Barnier told reporters after hosting two days of talks with his EU counterparts in Annecy, eastern France.

"There are contrasting opinions on the budget for this policy, on the tools and the means, but everyone wants to keep the CAP (Common Agricultural Policy)" he added.

France, which holds the EU's rotating presidency, wanted the meeting to launch debate on the future objectives of the CAP, before the normally heated discussions begin next year or in 2010 on the bloc's overall budget from 2013.

The Common Agricultural Policy, the oldest of all the common European policies, currently swallows up 40 percent of the entire EU budget.

Despite reforms it remains the single biggest item in the combined EU budget, handing out 53 billion euros (78 billion dollars) of aid to farmers.

Over recent years, it has become the subject of rows between those nations led by Britain which want farmers paid according to the market and more interventionist states, led by France, the biggest beneficiary of the farm subsidies.

Paris argues that soaring global food prices and the resultant food crisis increases the need to protect the farming sector.

"There are still some 20 (of the 27 EU) countries that want to preserve a strong CAP, with regulation, with a coherent budget," said Barnier.

"Then you have the countries that want to put the market at the middle of the CAP," he added.

France, which faces becoming a net contributor to the CAP after 2013 as the cake is sliced more thinly in an enlarged European Union, can count on support from, among others, Ireland, Italy, Poland, Spain and its biggest ally Germany.

"We stand side-by-side with France on most of the points," said German Farm Minister Horst Seehofer.

For Britain the strategy is clear and very different.

"We want to see farmers rewarded for environmental benefits, we want to see them able to operate within a market system where we reduce subsidies for production," said Jonathan Shaw, British Minister for Rural Affairs.

"The UK long-term position is that we would like to see the CAP budget be reduced quite significantly after 2013," another British diplomat said.

"Forty percent (of the total budget) is too much," echoed Swedish Farm minister Eskil Erlandsson.

The European ministers published a joint declaration which highlighted general agreement on the need for the CAP in future to reward farms which produce more and better crops while respecting the environment.

But the text admitted that opinions were split on how best to achieve that goal.

The Czech Republic, which will assume the EU presidency from France in January, agreed to continue the debate next year but was not talking up hopes of an agreement.

"There will be quite a task to try to narrow the, so far, very wide areas of opinions and try to develop one common EU approach on CAP for after 2013," Czech Agriculture Minister Petr Gandalovic said.

While waiting for the battle for the budget 2013-2020, EU nations must reach agreement on the intermediate reform of the CAP, itself a fraught issue, including the gradual scrapping of milk quotas and reducing direct farm handouts linked to production levels.

Barnier said he was "confident" of reaching an interim deal by mid-November.

Informal meeting of EU agriculture ministers in Annecy

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