EU member states and the European Parliament on Wednesday (26 June) agreed major changes to the bloc's Common Agricultural Policy (CAP). The deal will determine how the €50 billion a year pot is divided among countries over the next 2014-2020 period.
CAP - which eats up the biggest chunk of the EU budget - is meant to aid farmers throughout the EU, but has been criticised for the opaque way it distributes subsidies. The biggest losers in the new deal are set to be large farms in countries such as France and Germany, as the agreement changes how entitlements for subsidies are calculated, no longer tying historical production levels to direct payments.
To stop large farms losing too much of their current subsidies, the deal gives governments the option of limiting the losses to 30 percent. Farmers receiving the least amount of direct payments per hectare will be entitled to at least 60 percent of the national or regional average.
Other provisions include abolishing sugar quotas by 2017, mandatory aid for young farmers, and tying some direct payments to help the environment in rural areas.
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Meanwhile, one issue which remains to be decided is a proposals to limit payments to large farms to €300,000 a year - something governments say should be optional but which parliament wants to be mandatory.
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Under the compromise, 30 percent of all future direct subsidies would be dependent on farmers becoming greener, including leaving 5 percent of their arable land fallow for wildlife.
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