EU Finally Agrees On CAP Reforms

EU countries have forged an agreement to revamp their farm support policy with increases in milk quotas and cuts in subsidies for production, European diplomats say.

The compromise deal was reached after marathon talks by EU farm ministers in Brussels.

"We have reached a near-unanimous accord," said French Agriculture Minister Michel Barnier, whose country holds the EU's rotating presidency until the end of the year.

The changes expand on the major reform of the EU's controversial Common Agricultural Policy (CAP) in 2003, pushing European farmers further into the world of supply and demand with a smaller safety net of subsidies linked to production levels.

The ministers notably agreed to progressively lift milk quotas for farmers -- in place since 1984 to limit production -- before abandoning them entirely by 2015.

Specifically, the quotas would be raised by one percent for five years.

At the other end of the scale, some countries, like Italy, want their quotas to disappear immediately, and Rome was given a dispensation allowing it to raise its quotas by a one-off five percent as soon as next year.

There was also agreement on the thorny issue of reducing subsidies directly linked to farm production and switching the funding to projects to protect the environment or revitalise rural areas.