European Union leaders reached an overall deal on the financing of the bloc's eastward enlargement today, clearing the way for final negotiations with ten candidates to join in 2004, diplomats said.
The deal, at the end of a two-day summit in Brussels, was based on a Franco-German compromise under which EU farm spending will be curbed from 2007 and direct farm payments will be phased in for new member states from 2004.
The Irish Farmers Association (IFA) today gave a guarded welcome to the agreement.
This new position is music to the ears of countries like Ireland and France, both large beneficiaries of the EU's Common Agricultural Policy (CAP) and staunch opponents of European Commission plans for a sweeping reforms that envisages gradual reductions in direct aid.
The IFA welcomed the fact that the plan will provide budget security for the CAP up to 2013.
The European Commission's plans to overhaul the CAP now look set to be delayed until at least 2006 after the deal, brokered between Germany and France.
With farm spending now looking fixed for at least the next few years, the urgency for reform as advocated by EU Farm Commissioner Mr Franz Fischler in his policy blueprint - known as the mid-term review - has effectively been removed, as far as its budgetary impact is concerned.
"You can't say the whole thing is dead -- yet. As far as we are concerned, it (mid-term review) is still on track but certain parts will be delayed," said a Commission official.
IFA President, Mr John Dillon, said: "The major implication of the deal in Brussels on the funding of the CAP budget after 2006 is that the Fischler CAP reform proposals must go back to the drawing board."
Mr Dillon said: "The key challenge is to ensure that family farms have a viable future through a combination of fair market returns based on preference for EU production and supply management, as well as the maintenance of direct payments, and environmental and rural development policies".
France, along with several other mainly southern European nations, takes the view that as EU member states agreed on a 2000-2006 budget for CAP back in 1999, this is not the time for the root-and-branch reform advocated by Mr Fischler.
CAP swallows nearly half of the EU's overall budget of almost €100 billion a year.
The Commission has argued that farm reform is increasingly urgent, repeatedly saying it expects final agreement among the EU's 15 member states in the first half of 2003.
Mr Fischler's proposals envisage breaking the historic link between production and subsidy payments, responsible for the notorious wine lakes and butter mountains of previous years.
More funding would be directed into rural development by limiting outlays to big farms and reducing direct aid over time.
Additional reporting by Reuters