Farmers must take advantage of "revolutionary" agricultural reforms which pave the way to a more profitable and environmentally sustainable future for the countryside, the Food and Farming Minister Lord Whitty has said today.

Speaking today at the Oxford Farming Conference, Lord Whitty said the deal to reform Europe's Common Agricultural Policy (CAP) had "exceeded expectations", but to reap the rewards at home and abroad the hard work had only just begun.

He said that Ministers were considering a range of decisions which would set the framework for implementing the major CAP reforms, including options for allocating entitlements under the new Single Farm Payment scheme - on an historic, area flat-rate or hybrid basis.

Lord Whitty said that decision was "not clear cut" but decoupling in whatever form would achieve economic, environmental and development objectives.

Lord Whitty said: "The challenge for farming is to take advantage of the opportunities created by CAP reform, the most radical yet in the 50 years of CAP. For the first time we achieved a revolutionary change by breaking the link between subsidy and production through decoupling.

"The reform deal also shifted support towards wider rural, landscape and environmental objectives. It gave us a very significant degree of flexibility, and transformed the European Union from the most internally protectionist in the World Trade Organisation to being on the front foot in agriculture's contribution to trade liberalization."

Lord Whitty said the reforms freed farmers from artificial production incentives of the past, enabling them to make informed business decisions based on what their customers wanted, rather than how much subsidy they can get, and streamlined bureaucracy to reduce burdens on the industry.

The government has already announced that it will implement the new CAP Single Farm Payment from 1 January 2005 on a country-by-country basis. England, Scotland, Wales and Northern Ireland will decide according to local priorities.

He added that Defra would be consulting on national envelopes and cross-compliance.

(gmcg)