Agriculture Minister, Ian Pearson has welcomed this morning's agreement on subsidy payments to farmers as part of the Common Agriculture Policy (CAP) discussions.

The compromise deal will abolish most of the subsidies that reward farmers according to how much food they grow, however individual countries will be able to keep some of the food subsidies to avoid farmers abandoning the land.

Mr Pearson said: "I am pleased that an agreement has been reached that will create a long term stable policy environment and remove the current uncertainty. The final deal has many positive outcomes for Northern Ireland.

"I pressed very strongly to ensure that in the implementation of the new arrangements, Northern Ireland would have full flexibility to determine outcomes which reflect fully the needs of the industry here. I am therefore very pleased that the Council accepted our demand for regional flexibility."

Mr Pearson claimed Northern Ireland had much to gain from the new deal including:

• Cereals - the proposed 5% cut in intervention prices has been removed;
• Dairy - quotas are extended to 2015 and the magnitude of the original price cuts are significantly reduced. Compensation for price cuts above those agreed as part of Agenda 2000 has been increased from 50% to over 80%;
• Modulation - the UK will now get back 80% of its contribution to compulsory EU wide modulation compared to 66% in the original proposals;
• Degressivity - is not now prescriptive and will depend on the position of the Agriculture budget. The Council rather than the Commission will also now make the decision based on the sole criterion of budgetary ceilings.

Mr Pearson said the deal heralded a new era for the farming industry in Northern Ireland by shifting the basis of production towards a market orientation.

"The business climate for the Agri-food business has now changed radically and I intend to revisit our current strategies over the coming months to ensure that Northern Ireland is positioned to maximise its potential as a region in National and International markets. The Agri-food business must focus on excellence in both production and processing," he added.

The new changes where first proposed by EU Agriculture Commissioner Franz Fischler who is currently pushing on the EU to bring farm subsidies in line with world trade rules.

(MB)