The European Union’s Council of Ministers has agreed on a reform of the Common Agricultural Policy (CAP) support for tobacco, olive oil and table olives, cotton and hops.

“These reforms will lead to enhanced competitiveness, stronger market-orientation, improved environmental respect, less trade distortions and stabilised incomes for farmers,” the European Commission said.

For the four sectors concerned, a significant part of the current production-linked payments will be transferred to the decoupled single payment.

For olive oil, the Council decided that member states may maintain a coupled payment of up to 40%. A minimum of 60% of the average current production-linked payments during the reference period 2000-2002 (€2.3bn per year for the EU15) will be converted into entitlements under the single payment scheme for holdings larger than 0.5 ha.

Olive farms smaller than 0.5 ha will see their payments completely decoupled from 2006, the Commission said.

The remaining aid paid (40%) can be retained by the member states as national envelopes to grant producers of an additional olive grove payment.

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