But Jack Thurston, the co-founder of Farmsubsidy.org, which campaigns for budgetary transparency in European farm spending, said the significance of the reforms would be only very slight for trade relations because most of the international friction about farming in Europe concerned tariffs, rather than quotas or spending.
Among the measures agreed to early Thursday morning was to increase annual milk production quotas each year ahead of a planned abolition of the quota system in 2015.
In addition, EU governments agreed formally to abolish the so-called set-aside, which required some farmland to be kept out of production over the past two decades. EU officials say many farmers already are using all of their farmland, after an earlier agreement to lift the rules temporarily. Abolishing the set-aside entirely should foster greater food production and combat price rises, EU officials say.
The measures also reduce direct payments to medium-sized farmers and to big landowners. That money is to be shifted into other forms of rural spending, such as measures to protect the environment or revitalize the countryside.
But the measures did not go as far as EU officials had hoped. Fischer Boel, the EU agriculture commissioner, had sought a further 8% of all direct payments above €5,000 be shifted to rural projects, but governments limited that increase to 5%. Fischer Boel also had sought to reduce direct payments to the biggest subsidy recipients by up to 9%. But governments scrapped that plan, agreeing instead to reductions of 4% for payments above €300,000 a year.
Thurston, of Farmsubsidy.org, said large landholders had managed to maintain their benefits. “The changes will not get the Queen, the Duke of Westminster, or Prince Albert of Monaco off of the front pages of newspapers for being the major beneficiaries of these payments,” he said.
With milk prices declining in recent months after sharp rises earlier in the year, some dairy farmers turned up pressure on their governments to go slow on quota reforms, warning that sharper drops in milk prices could hurt their livelihoods. Germany, along with Austria and others, said that moving to jettison quotas too quickly could jeopardize the future of farmers in their mountainous regions.
As a special concession, those farmers will be allowed to use some money earmarked for other sectors. EU officials also will review the plans to scrap the milk quotas in 2010 and 2012 to ensure there would be no serious, long-term damage to the sector.
Italy, by contrast, won a special right to increase production more than other countries in light of its tendency to mismanage production and regularly produce more than the rules had permitted.
Generally, however, the move to end quotas on milk by 2015 would lead farmers to increase the size of their dairy herds in the most productive pastureland in Europe, leading to reduced prices for consumers in the near to medium term, experts said.
France was allowed to continue receiving subsidies that are based on farming sheep and goats. France also lobbied for, and got, a guarantee that the European Commission would have to buy its wheat at a guaranteed price of €101.31 per tonne if prices sink beneath that level, up to 3 million tonnes a year.