andrewducker | EU agrees CAP reform deal

A Guardian Report on CAP reform brings great news.

The biggest shake-up ever in European agriculture was agreed today, as ministers approved a deal to reform the system of paying subsidies to farmers.

Farmers will no longer be paid for their production, regardless of market conditions, and any subsidies will be closely linked to environmentally friendly farming methods.

The current system encourages farmers to produce surpluses of unwanted food because they receive EU payments regardless of demand. The EU then has to pay to "dump" the unwanted food on third markets, angering Europe's hard-pressed trading partners.

The basic cost of running the CAP will remain unchanged at about £30bn a year - half the EU budget. Subsidies will continue to flow, but now they will be linked to more modern farming methods connected to rural development and the environment.

Slashing farm subsidies was a sensitive issue for many. Only last week the French president, Jacques Chirac, threatened to veto a deal without compromise. Today's accord gives the French a face-saving formula: their farmers can keep most of their subsidies until 2007, while other member states, including the UK, will move to "100% de-coupling" in 2005.

Now, if we can just persuade the US to do the same...