The reform to apply to Austria, Belgium, Denmark, Germany, Ireland, Italy, Luxembourg, Portugal, Sweden and the UK changes the way the EU supports its farm sector by offering farmers new 'single farm payments', severing the decades-long link between subsidies and production.
Reform will make 'EU farmers more competitive and market orientated, while providing the necessary income stability,' said the Commission.
. According to Brussels - that prior to the new rules had pushed EU member states hard for farm reform - more money will be available to farmers for environmental, quality or animal welfare programmes by reducing direct payments for bigger farms.
'The changes will give consumers what they want, offer taxpayers more transparency and contribute towards more market-orientated world farm trade' added Europe's legislative body.
Commenting on the entry into force of the reformed CAP, Mariann Fisher Boel, Commissioner for Agriculture and Rural Development said: "The reform will allow us to play to our strengths, producing world-renowned foods of the highest quality. And it sends out a strong signal to the world, boosting the chances of a successful outcome to world trade talks."p> Key elements of the new, reformed CAP are:a single farm payment or single payment scheme (SPS) for EU farmers, independent from production; limited coupled elements may be maintained to prevent abandonment of production, this payment will be linked to the respect of environmental, food safety, animal and plant health and animal welfare standards, as well as the requirement to keep all farmland in good agricultural and environmental condition ("cross-compliance").
In addition, new measures to promote the environment, quality and animal welfare and to help farmers to meet EU production standards starting in 2005, and a reduction in direct payments ("modulation") for bigger farms to finance the new rural development policy.
The SPS applies to the main market sectors, including cereals, meat and milk. The tobacco, olive oil and cotton sector will be added to the system in 2006.
The five other 'old' member states - Finland, France, Greece, the Netherlands and Spain - will apply the SPS in 2006 while two more recent member states who opted for the SPS, Malta and Slovenia, will start in 2007.
In the eight other new member states the "Single Area Payment Scheme" (SAPS) applies but from 2009 at the latest the new SPS system is slated to be in place.