EU farm ministers have adopted a fundamental reform of the Common Agricultural Policy (CAP), which will completely change the way the EU supports its farm sector.

The European Commission said the new CAP will be geared towards consumers and taxpayers, while giving EU farmers the freedom to produce what the market wants.

The new agreement, which was reached after weeks of tense negotiations, means that in future, the vast majority of subsidies will be paid independently from the volume of production. To avoid abandonment of production, Member States may choose to maintain a limited link between subsidy and production under well defined conditions and within clear limits. These new "single farm payments" will be linked to the respect of environmental, food safety and animal welfare standards.

The Commission said that severing the link between subsidies and production will make EU farmers more competitive and market orientated, while providing the necessary income stability.

More money will be available to farmers for environmental, quality or animal welfare programmes by reducing direct payments for bigger farms.

The council further decided to revise the milk, rice, cereals, durum wheat, dried fodder and nut sectors.

The different elements of the reform will enter into force in 2004 and 2005. The single farm payment will enter into force in 2005. If a Member State needs a transitional period due to its specific agricultural conditions, it may apply the single farm payment from 2007 at the latest.

Commenting on the decision, EU Farm Commissioner Franz Fischler said: "This reform also sends a strong message to the world. Our new policy is trade friendly. We are saying goodbye to the old subsidy system which significantly distorts international trade and harms developing countries.

"Today's decision will give Europe a strong hand in the negotiations on the Doha Development Agenda. The EU has done its homework, now it's up to others to move to make the WTO trade talks a success.

"But let there be no mistake. At the Cancún Ministerial Meeting, the EU will be ready to use its increased negotiating capital only if we get something in exchange. Unilateral disarmament is not on.

"The ball is now in the camp of other countries, such as the US, whose agricultural policies continue to be highly trade-distorting and have even become increasingly so."

Further information on the reform is available here.