BRUSSELS, June 25 — European Union negotiators struck a deal today on contentious parts of the bloc’s farming subsidies, raising hopes for agreement on an overall package which seeks to protect the environment.

Negotiators from the European Parliament and EU member states are attempting to end a three-year struggle over the future of the Common Agricultural Policy (CAP), which will spend €387 billion (RM1.9 trillion), a third of the EU’s 2021-2027 budget, on payments to farmers and support for rural development.

The aim is to divert more money to smaller farms, rather than supporting big agro-industry businesses, and ensure that cash is spent in ways that protect nature and cut the 10 per cent of EU greenhouse gases emitted by agriculture.

"We are very close to a good compromise. Closer than ever. We made a huge progress overnight on most sensitive issues,” said EU agriculture commissioner Janusz Wojciechowski, who participated in the talks.

The new CAP rules apply from 2023 and do not cover Britain following its exit from the EU.

Negotiators agreed on rules to require countries to spend 20 per cent of payments to farmers from 2023-2024, rising to 25 per cent of payments between 2025-2027, on "eco-schemes” that protect the environment, according to a document seen by Reuters. Examples of eco-schemes could include restoring wetlands to absorb CO2, or organic farming.

Any funds below those limits that are not spent on eco-schemes must be spent on green measures in other areas instead.

Parliament had wanted a higher 30 per cent share, while member states’ starting point was 20 per cent.

Campaigners said the deal did not align agriculture with EU green goals, and the rules failed ensure countries would reward farmers for protecting nature, while intensive farming practices could continue to receive funds.

European Environmental Bureau policy officer Celia Nyssens said there was a risk eco-schemes would "pay for the status quo”, since the rules did not include a strict definition to ensure they delivered environmental benefits.

Green lawmakers said they would reject the deal when European Parliament votes on it in the coming months, and called on other lawmakers to do the same.

Other tentative agreements included rules requiring EU countries to redistribute at least 10 per cent of CAP funds to smaller farms. Countries could dodge this requirement if they use other methods to distribute the funds fairly.

Farmers’ payments would be tied to complying with environmental rules, such as setting aside 4 per cent of arable land for areas where nature can thrive.

EU auditors this week said the current CAP was failing to reduce emissions, despite spending €100 billion in "climate-friendly” subsidies since 2014. EU agriculture emissions, half of which come from livestock, have not decreased since 2010. — Reuters