European Union farm ministers have reached agreement on limited reforms to the Common Agricultural Policy (CAP).

But the deal, which followed three weeks of tough negotiations and marathon all-night ministerial talks in Brussels, failed to achieve the overall cuts in spending originally set by the EU heads of government.

UK Agriculture Minister Nick Brown and colleagues from Sweden, Italy and Denmark hailed the deal, but there was no unanimity on where the cuts in farm subsidies should fall.

"We have reached a qualified majority on the proposals and that means there is an agreement," Mr Brown said.

The ministers had been trying on and off since late February to conclude an agreement on reforming spending on the European Union's farms.

The deal affects all farming sectors

They were under pressure from EU heads of government to peg the CAP at about 45bn euros (�30bn) a year by 2006 - half the current annual total running costs of the European Union.

They have agreed reforms to the EU's cereals, beef and dairy regimes, cutting internal prices and offering farmers higher direct aid payments.

It will take place in two stages, in 2000 and 2001, instead of the European Commission's proposal for a one-off reduction.

The approach of a summit of EU leaders in Berlin later in March had increased the pressure for a deal on agriculture, which consumes almost half of EU spending.

Deal 'well short'

The final compromise agreement includes cutting support prices to beef farmers and cereal growers by 20% although this would be phased in, with cuts of 15% to some dairy sectors - though these would be delayed for another three years.

To soften the blow for farm incomes there will be direct aid payments to farmers to compensate them in the early days as they adjust, so at first the deal will actually cost EU taxpayers more.

However the deal fell well short of the European Commission's original proposals, either delaying or watering down the plans.

BBC Brussels Correspondent David Eades said that two major proposals had been dropped:

• A plan by Germany to make individual countries themselves pay some of their farmers subsidies
• A gradual annual cut in direct payments to farmers

The deal, which sets the subsidy bill at about 40bn euros (�27bn) a year, was approved by almost all ministers, with only Portugal saying it could not support the compromise.

European Farm Commissioner Franz Fischler was upbeat after the agreement saying the package "amounts to the most radical reform since the CAP was first established in the early 1960s".

Beef subsidies will eventually be cut 20%

However he said that meeting the demands of national delegations had added about 1.4bn euros (�1bn) to the cost of reform.

"We always knew it would be necessary to increase spending to obtain reform - reform costs money," said UK agriculture minister Nick Brown.

The National Farmer's Union President, Ben Gill, told BBC Radio 5Live he welcomed the deal but said there was a lot that still concerned him.

"At least we've got a settlement that sets us in the direction now that can move us towards more market orientation," he said.

The European Commission has argued that the farm and spending reforms, known collectively as Agenda 2000, are needed for the EU to achieve its planned expansion eastward and to have a position it can defend in world trade talks later in the year.