The European Commission proposed far-reaching reforms to the Common Agricultural Policy (CAP) today. Here are the main points:
BUDGET
Expenditure to remain within the near - €40 billion a year ceiling set under Agenda 2000 for the period 2000-2006.
Aims to make a saving of €200 million by 2006.
MORE SUSTAINABLE DIRECT PAYMENTS
An end to production-related subsidies. Instead farmers are to get a flat-rate payment based on compliance with environmental, animal welfare and farm safety standards.
Introduction of single flat-rate payments, fixed on a historical basis, taking account of the amount of EU money farmers have received over the past three years.
Farmers receiving between €5,000 and €300,000 in aid will have flat-rate payments reduced by three per cent over seven years to a maximum of 20 per cent.
Direct aid to individual farmers capped at maximum of €300,000, with funds transferred to rural development in each EU country.
Money removed from direct payments is to be recycled into rural development funds.
RURAL DEVELOPMENT
New food quality and animal welfare rules to enhance the effectiveness of quality assurance and certification schemes.
Funds for farmers who need to upgrade farms to comply with strict food safety, environmental or animal welfare rules.
Aid for farm audits and the mandatory use of the community-wide system of farm auditing for farms receiving more than €5,000 per year.
MARKETS
Guaranteed cereals prices to be cut by five per cent to €95.35 a tonne from 2004/2005 and the abolition of monthly increments.
A review of border protection mechanisms.
Complete abolition of intervention for rye.
A cut in the special premium paid to durum wheat growers to €250 per hectare and the abolition of specific aid in established areas. Quality premium of €15 per tonne.
A cut of 50 per cent in basic price for rice to €150 per tonne in 2004/05.
New safety net intervention for rice at €120 per tonne.
Rice growers to be compensated based on production by €75 per tonne and by €102 per tonne aid not linked to production.
€160 million for dried fodder producers and a single support scheme for the industry of €33 per tonne.
A flat-rate payment of €100 per hectare for nut growers and a national top-up of €109 per hectare.
For dairy, options envisaged are 1) continuation of system agreed under Agenda 2000, 2) repeating Agenda 2000 deal, cutting intervention price, 3) introduction of a two-tier quota system, one with high prices for domestic market and the other at lower prices to compete on world market, 4) removal of diary quotas.
Compulsory 10 per cent of land must be left fallow on non-rotational basis for 10 years. Extra aid to compensate farmers of bio-fuel crops currently allowed on set-aside.