The European Commission has approved a radical reform of Europe's much-criticised Common Agricultural Policy (CAP) that would sever the link between farm subsidies and output.

European Union Agriculture Commissioner Franz Fischler said farmers would be offered a single "direct payment" based on past income, providing strict environmental conditions are met.

Fischler: CAP needs complete facelift

The move will thus cut out the current, bewildering array of payments based on the number of livestock or the amount of land under cultivation.

Tough talks lie ahead as the reform has still to be approved by the EU's 15 national parliaments but it has been cautiously welcomed both by non-European competitors and states applying for EU membership.

"It is not enough just to touch things up cosmetically," Mr Fischler told the European Parliament.

"We need a complete facelift to give credibility to the CAP."

Proposed reforms to CAP

Remove link between production and subsidy Payments to be reduced over time Impose ceiling of 300,000 euros (�187,500) per subsidy to large farms Very small farms exempt from any cuts Make direct aid dependent on observing environmental and food safety laws Gradually cut support payments for rural development Introduce farm subsidy inspection system

In Germany, Agriculture Minister Renate Kuenast welcomed new environmental controls but warned that aspects affecting the poorer east of the country might be unacceptable.

Defenders of the 40-year-old CAP say it is unfair to revisit the issue only three years after an earlier reform package.

The French argue that the United States recently raised its own domestic subsidies, but Mr Fischer slammed the Farm Bill there as "stone-age" and "deplorable".

Concession to new members

There have been fears that the CAP reform will complicate EU accession talks with former Communist countries such as Poland, which expect the same subsidies as member-states.

But Mr Fischler announced that farmers in candidate-countries would receive the same level of direct aid from 2011, not 2013 as originally envisaged.

Poland's Secretary of State for EU Affairs, Danuta Huebner, said the CAP reform appeared to be "beneficial for the competitiveness of Polish agriculture".

Some farmers are expected to react with fury

In Latvia, Agriculture Minister Atis Slakteris said there now seemed to be a chance of a "level playing-field for everyone".

"The possible maximum amount that has been mentioned for one farm to claim - 300,000 euros - in Latvian terms is quite a large sum," he said.

At the same time, BBC Europe correspondent Chris Morris reports, the Commission is keen to avoid the impression of wanting to reform the CAP in order to fund enlargement.

'Fairer world trade'

The CAP has been a running sore in relations between the EU and developing countries who complain that their farmers are undercut by subsidised imports from the EU.

Australian Trade Minister Mark Vaile told the BBC that developing countries desperately needed fair access to markets for their own agricultural exports.

He said the CAP reform would help remove distortions in world trade.

In the US, the biggest farmers' group welcomed the reform, saying it would remove some of the artificial incentives for EU farmers to produce.

Mixed feelings

Scores of Spanish farmers demonstrated against the reform near the commission's headquarters in Brussels on Wednesday, banging drums and blocking traffic.

In Britain, the National Farmers' Union fears that since ministers are so keen to see changes to the overall policy, they will be prepared to accept measures which are against the interests of their own industry.

UK Government sources have indicated that they too are unhappy about this aspect of the package.

They are also concerned that the proposals will do little to cut the overall cost of the CAP, since the reductions in subsidy will be ploughed back into new payments for environmental improvement and rural development.