New EU vision for farming until 2013 will hit subsidies for the UK's bigger farms...

THE EU this week unveiled its long-awaited proposals for the mid-term review of the Common Agriculture Policy.

The document published on Wednes-

day, set out the policy framework for agriculture in Europe until 2013, reports Justin Hawkins.

At its centre are plans to replace most EU production-based subsidies with a single whole-farm payment to be "decoupled" from production.

If the proposals make it through various procedural stages unchanged, the single payment will replace various schemes such as the Sheep Annual Premium Scheme, Beef Special Premium and the Suckler Cow Premium and will apply to most sectors from sheep, dairy, and beef to arable. The amount paid to each farm will be calculated on figures from 2000 to 2002. There will also be an element of "cross-compliance" with payments linked to environmental, food safety and animal welfare conditions.

Another major element of the proposals is the modulation of payments from 2007. Modulation basically skims money off agricultural support payments to raise cash for rural development schemes such as countryside stewardship and support for diversification.

Under the proposals, small producers receiving less than 5,000Euros (around £3,300) subsidy will escape modulation, but larger units earning between 5,001 and 50,000 Euros face losses increasing from one per cent in 2007 rising to 12.5 per cent by 2013. The largest farms, receiving more than 50,000 Euros, stand to lose 19 per cent of their subsidy by 2013.

That measure is likely to hit British agriculture particularly hard because of the number of large units in the UK. In Cumbria, where farms are traditionally smaller, the effect may not be as big but dozens of the county's larger farms look likely to suffer the heaviest losses.

NFU president Ben Gill said he accepted decoupling subsidy from production was "right in principle", it was crucial that the EU got the details of its application right.

He was, however, more critical of the modulation proposals. He said it unfairly targeted large farms. He blamed a "stitch-up" deal between France and Germany which freezes the EU agriculture budget from 2006 for forcing Mr Fischler to target big farms to recoup funds for rural development.

Agriculture minister Margaret Beckett praised Franz Fischler for "breaking the link between subsidy payment and production"

Mrs Beckett also expressed "disappointment" that the document suggested the current system of milk quotas for the dairy sector could remain in place until 2013. However, the EU is soon to begin discussions on structural changes in the dairy sector when early reform of the milk quotas system will be on the agenda again.