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Major EU farm reform back on track

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Major EU farm reform back on track

Photo © Valcho - Fotolia

(BRUSSELS) - A major reform of the European Union's generous farm subsidy programme was approved late Tuesday after being held up by last-minute demands from lawmakers for even deeper changes.

A reform of the programme agreed by member states in June after marathon talks favours young farmers and smallholders over big business and has been called a "paradigm shift" for Europe.

But EU parliamentarians demanded even more changes and threatened to delay approval of the reform till after a September 30 deadline set by the European Commission, the EU's executive arm, which threatened to cut off funding to farmers without a deal.

In the end, lawmakers were offered small concessions on funding for poorer farmers.

European Agriculture Commissioner Dacian Ciolos said he was "delighted with this agreement" which gives the bloc's Common Agricultural Policy (CAP) "a new direction".

The CAP accounts for about 38 percent of the EU's budget and national interests have long held up reforms.

The main sticking point was how the reform affects large-scale farmers, with lawmakers pushing for more redistribution of farm aid to small holdings and ministers maintaining the reform has gone far enough.

The CAP reform is due to be implemented starting in 2014 with many of its biggest innovations kicking in gradually over time.

As things stand today, 80 percent of CAP payments go to the top 20 percent of intensive farm businesses since several countries still link the subsidies to production levels.

But in the reform, member states would have to ensure that by 2019 each farmer receives at least 60 percent of the average national or regional subsidy per hectare. This would remove the advantage written into the current system for the more productive industrial farms.

The deal also states that 30 percent of EU members' farm payments will be spent on "green" measures such as crop diversification.

Reform of the common agricultural policy: Final political agreement between EU institutions for MFF related issues

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