BRUSSELS, Belgium (Reuters) — European Union negotiators have agreed to a five percent minimum reduction in subsidy payments that are worth more than $200,000 a year to individual farms.
The deal finalizes sweeping re-forms to the Common Agricultural Policy.
Under the deal, EU governments will have the option of capping individual payouts at $420,000 a year. The two other institutions in the talks — the European Parliament and European Commission — had wanted a mandatory cap.
EU negotiators had agreed on most elements in the complex overhaul of the $67 billion CAP by the end of June.
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Among the changes were new environmental requirements for farmers and an end to EU sugar production quotas from 2017.
The recent deal on the remaining issues dispelled fears that payments to farmers would be disrupted if the legislation was not in place by the start of next year, when the reforms begin to enter force.
“I am delighted that we have now been able to finalize the reform as a whole,” EU agriculture commissioner Dacian Ciolos said in a statement.
“This is important for European farmers as it provides them with greater certainty for the coming year.”
Other parts of the deal were in line with an agreement struck by EU leaders in February on the bloc’s long-term budget for 2014-20, of which the CAP remains the largest item.
It includes plans to reduce the disparity between producers in Italy, Belgium and the Netherlands, who receive more than $200 per acre on average, and those in the Baltic states, such as Lithuania, who receive less than $80 per acre.
The deal must now be formally rubber-stamped by EU governments and the Parliament before the reforms begin to bite starting next year.
Changes to the direct subsidies paid to farmers, which are worth about $56 billion a year, will take effect only in 2015.
