THE EUROPEAN Commission is to unveil a shake-up of the Common Agricultural Policy today in a move expected to start a lengthy debate between EU capitals.
In draft proposals seen by The Irish Times, EU farm commissioner Mariann Fischer Boel is suggesting phasing out milk quotas by 2015, abolishing arable set-aside and further cutting the link between production and payment.
Irish farmers are set to criticise a suggestion to raise the amount spent on rural development rather than on direct aid to farmers.
At the moment, farmers receiving more than €5,000 have their payments cut by 5 per cent and the money is redirected to a budget line promoting rural development. It is proposed that this will be increased to 13 per cent by 2012. Bigger farms will be subject to further cuts - an extra 3 per cent for those receiving more than €100,000 a year; 6 per cent for those receiving over €200,000 and 9 per cent for those getting over €300,000 in handouts.
The represents a watering down of previous suggestions to actually cap subsidies for richer farmers - following pressure from Germany and the Czech Republic. But it still allows Brussels to say it is making those currently benefiting most from the EU's farm largesse feel the greatest change.
Specifically, Ms Fischer Boel, who has been lobbied intensely on the issue, is proposing to abolish the requirement for arable farmers to leave 10 per cent of the land fallow, allowing them to instead maximise production.
She is also proposing a "soft landing" on milk quotas whereby there are four annual quota increases of 1 per cent between 2010-2011 and 2013-2014 before they are fully abolished in April 2015.
In addition, farmers will be required to maintain certain environmental standards and improve water management, while intervention mechanisms would be abolished for durum wheat and tendering set for bread wheat.
The shake-up builds on reforms carried out in 2003 which first introduced the principle of severing the link between production and payment. But despite these reforms, the EU farm budget still accounts for about 40 per cent of the bloc's entire budget.
The proposals come as global food prices rise dramatically, driven by a massive growth in demand from China and India.