EU agriculture ministers early this morning agreed a farm package for Agenda 2000 with new proposals on beef compensation payments that go far to meeting Irish concerns.
Although the compromise controversially postpones reform of the dairy regime it pledges, to the fury of Irish farm organisations, the abolition of milk quotas from 2006.
The deal raises hopes that leaders will be able to reach agreement in Berlin in two weeks on the full Agenda 2000 budget package for the 2000-2006 period, including structural funds.
Meanwhile talks in Luxembourg between the Commission's statistical service, Eurostat, and the Irish Central Statistics Office, have failed to resolve differences over Ireland's regionalisation proposals.
The Agriculture Commissioner, Mr Franz Fischler, last night welcomed the farm deal as endorsing the philosophy and objectives underlying the Commission's proposals for the reform of CAP.
But although some of the budgetary difficulties are addressed in the new compromise paper, there were fears that finance ministers, meeting on Monday would demand further budget cuts, particularly in direct aid payments.
Last night there was an angry reaction by Irish farmers organisations to the proposed ending of milk quotas after 2006.
The main elements of the latest compromise are:
In beef - guarantee price cuts moderated to 20 per cent from the Commission proposal of 30 per cent;
A new slaughter premium of 80 euros on all adult animal calves, to be paid for out of "discretionary" national envelope;
Increases to 200 euros per animal in the suckler cow premia from 169 euros and in special beef premia to 150 euros from 109 euros.
In milk - a delay of three years in guarantee price cuts of 15 per cent, in three phases from 2003;
A commitment to end quotas after 2006.
An Irish quota increase of 3 per cent with an increase also for Northern Ireland.
In cereals - guarantee price cuts of 20 per cent with setaside for three years.
Earlier a shot had been fired across the bows of those like the Irish and French who want to bring about budget savings by moderating or postponing milk reform.
The London Club of Britain, Sweden, Denmark and Italy, the most determined liberalisers of the dairy regime, issued a declaration warning of their willingness to block the renewal of quotas when they lapse next year unless they receive an absolute commitment to price cuts within two years and abolition of quotas by 2004.
Such demands are completely unacceptable to France and Ireland who oppose even the commitment to ending quotas in 2006.
The president of the Irish Farmers Association, Mr Tom Parlon, earlier protested that it was illogical and unnecessary to give equal subsidies through the new premium to the slaughter of old dairy cows and to prime beef. Such resources would be better employed in topping up suckler cow and beef heifer payments.
The IFA is concerned that although the latest proposals accept its argument for less radical guarantee price cuts in beef, this may result in denying exporters access to world markets in a new World Trade Organisation round of talks. Smaller price cuts should be accompanied by measures to control supply, the IFA says.
It will also seek improvements to the system of subsidies to extensive production.
Of the suggested ending of milk quotas after 2006, Mr Parlon warned it would "have a catastrophic effect on prices." The IFA argues that quotas help to sustain prices above the basic intervention levels.
Mr John Tyrrell of the ICOS said that although the agreement required close study there had been a substantial improvement in the Irish position from the original Commission proposals. But, he said, there were a number of specific concerns, notably the shortfall in compensation for price cuts.
