Margaret Beckett, Secretary of State for Environment, Food and Rural Affairs, says proposals for major changes to the system of farming subsidies under the Common Agriculture Policy (CAP) are on the right lines but they do not go far enough.

Responding to EC's views, Mrs Beckett said: "We fully support the commission's vision of a CAP which delivers economic viability and integration with our environmental and rural development objectives, while removing its trade-distorting aspects, especially those which damage developing countries.

"However, the proposals do not go far

enough. In particular, they do nothing to control the burgeoning growth in the budget because they simply recycle money in the agriculture budget. We need year-on-year savings in the cost of the CAP.

"There is some hard bargaining ahead."

The Countryside Alliance has branded some of the proposals as 'outrageous'.

The alliance said it was not happy that member states will be given the opportunity to opt out of match funding. The alliance believes each member state should be obliged to match-fund to create confidence in the farming industry.

Collecting 'modulated money' earmarked for rural development centrally in Brussels would be administratively expensive and the loss of income would drive many farmers out of business.

Tenant Farmers Association national chairman Reg Haydon said: "Our immediate reaction is that there is much of merit in the package.

"For some time, we have been saying that the current CAP is failing to meet its primary and justifiable objective of supporting producers. This is because the CAP has been a major contributor to costs, not least the value of land."

He expressed concern about a significant aspect of CAP proposals. "The commission has proposed that the de-coupled payments should be made on the basis of acreage entitlements. If this was to be introduced, the system would serve only to add value to land, increase rents and therefore provide no benefit to the farming community."

Updated: 09:10 Thursday, July 18, 2002