EC farm ministers approve radical reform measures

LUXEMBOURG (Agencies) - European Community farm ministers approved the most radical reform to date of the EC's Common Agricultural Policy (CAP), diplomats said last night.

Diplomats said the unanimous accord was struck around midnight, just before Britain was due to take over the EC presidency, allowing Portugal, which had held the presidency, to take the credit for the reforms it painstakingly negotiated.

Formal adoption of the package, which will cut cereals prices and take land out of use in a bid to cut the EC's food mountain, was delayed at the 11th hour by French and Italian demands that a law protecting foodstuffs originating in a particular place from imitation be adopted at the same time.

In the end a decision on the law, which was opposed by Denmark, the Netherlands and Belgium, was deferred until a later ministerial meeting, the diplomats said.

The accord is seen as a key card for the EC in efforts to conclude the GATT (General Agreement on Tariffs and Trade) Uruguay Round of world trade talks, which are stalled over a dispute between the Community and the United States over farm subsidies.

France and Italy agreed to the package only after assurances that the European Commission, the EC executive, would submit proposals dealing with particular problems their farmers face.

France had demanded a shopping list of concessions to pacify its farmers who have gone on a rampage against the reforms. Italy wanted to be able to produce more milk.

The French Farm Minister, Louis Mermaz, seeking to appease farmers back home, was given promises that the trade bloc would consider his demands for concessions within the farm reform program.

Farmers have set up road blocks throughout France, threatening to throw the annual July 1 trek to the Mediterranean beaches into confusion.

The overhaul of the EC's Common Agricultural Policy will cut large chunks of subsidies to the trade bloc's 10 million farmers and should make the EC more competitive on world markets. The reform should also slash the huge stocks of surplus food that farmers produced because even excess production was subsidised.

At the heart of the package is a 29 per cent cut in guaranteed prices for cereals over the next three years. It also provides for 15 per cent cuts in prices for beef.

Farmers will be fully compensated for the loss in subsidies by new income support if they take land out of production.

Currently agriculture takes up just over half the EC budget, which this years totals 66 billion European currency units. Under a proposed blueprint for the next five years, CAP spending would rise even more, but for the first time, it would be less than half the total budget. To keep it from increasing even further, the ministers have also agreed to freeze the farming prices for the year 1992- 1993.