The European Commission announced on Wednesday it would approve a revised plan drawn up by European Agriculture Commissioner Franz Fischler to reform the EU’s Common Agriculture Policy (CAP).

The new proposals, which take the line of ‘quality not quantity’ are aimed at breaking the traditional link between subsidy and output.

Grants will no longer be attached to production levels, but will be conditional on a number of statutory environmental, animal welfare and food safety standards as well as occupational safety requirements for farmers.

Under the revised plan, there will no longer be an originally proposed 300,000 euro ($ 298,000) limit on direct payments to farms with more than 1,000 hectares (2,500 acres).

In the original CAP reform blueprint issued in July of last year, Fischler outlined harsh plans to impose a maximum subsidy cap of 300,000 Euros on large farms. His proposals were met coldly by Germany, which feared for its high proportion of large-scale farms, particularly those in the former east.

The proposal would have had a disproportionate impact on eastern German states where, due to agricultural structures in the former communist regime, farms are on average seven times larger than those in other western states.

Fischler has since reviewed the figure, which will now be fixed at a higher, as yet undetermined rate.

Support of small farms

The hardest hit under the terms of the new framework will be farms which presently receive more than 50,000 euros. Subsidies to these farms are due to be cut by 19 percent by the year 2013. Farmers who currently receive grants of between 5,000 and 50,000 euros will see their subsidies honed down by 12.5 percent in the same period.

Small farms, which receive less than 5,000 euros under the existing CAP will be exempted in grant cuts. With this measure, Fischler hopes to correct the current inbalance that 80 percent of subsidies for agriculture are received by only 20 percent of Europe's farms.

Reducing the butter mountains

The CAP is a source of significant criticism on the international stage. Harking the call of output equals subsidy, farmers have long been systematically over-producing, creating butter mountains and wine lakes, and sullying the name of European agriculture among developing nations.

he main thrust of the agricultural overhaul is a long-term plan to reduce generous farm subsidies, which currently make up almost half of the 42 billion EU agriculture budget.

Commissioner Franz Fiischler aims to save 20 percent of the EU's current spending on agriculture, which will then be ploughed back into rural development.

Resistance to the reforms

Although the European Commission has backed the plans, farming associations were quick to reject them.

European Farming President Gerd Sonnleitner warned that the CAP reform could spell out the closure of many farms and a dramatic reduction in farming income, especially in Germany. In addition France, which is renowned for its strong agricultural lobbyists, is openly opposed to the new plans.

The EU Commission, however, says its studies prove that the overhaul of the old system would actually mean increased income and stable income for farmers.

"Our suggestions will give farmers a clear perspective for the future", Agricultural Commissioner Fischler said on Wednesday. "And they will no longer be forced to produce at a loss in order to receive support."

The next round

Fischler is keen to press ahead with the reforms as soon as possible, but faces cold winds from all over the European continent. The next round of negotiations are scheduled to start next week.

The discussions are likely to go on for several months yet as members try to reconcile deep-seated differences between those vehemently opposed to the scale of reform envisaged by Fischler, and those keen to agree on sweeping changes before ten new member states join the bloc next year.