Farmers, consumers and the environment would all reap the benefits of reforms to the Common Agriculture Policy (CAP), acording to a new government study.

An economic analysis by the Department for Environment, Food and Rural Affairs of the European Commission's latest proposals for CAP reform estimates better returns for producers, savings for consumers and more support for environmentally-friendly farming including:

- Overall economic benefits of about £0.4bn-£0.6bn (US$0.6bn-0.9bn) a year in the UK

- Farm incomes in the UK expected to be broadly unchanged although there will be differences between sectors

- Opportunities for increased incomes generated by greater productivity and efficiency in the industry

- Positive effect on the environment across the EU due to greater emphasis on rural development

- Overall little change in food prices for consumers, but some lower dairy prices offsetting higher cereals and beef prices.

Breaking the link between subsidies and production is central to exploiting these potential benefits, said Margaret Beckett, Secretary of State for Environment, Food and Rural Affairs.

A reformed CAP will be less bureaucratic and simpler to administer, and "farmers will spend more time with their crops and animals and less time farming paperwork", she said.

Speaking on the deadline day for a new outline World Trade Organisation deal on agriculture, Beckett said:

"Our economic analysis suggests an improvement in prospects for UK agriculture. It offers significant evidence to counter the apocalyptic predictions of those across Europe who claim that the proposed reforms would damage EU agriculture.

"Reform is essential for producers in the UK and across the EU. We must avoid further environmental damage, regenerate our rural areas and support our farmers in ways that allow them to plan ahead with confidence.

"The Commission's proposals offer significant potential benefits, and will enable us to lay the foundations for a new CAP, a sustainable CAP which will command wide support across an enlarged European Union."