By FWi staff

EUROPEAN leaders have agreed to keep future farm spending at 1999 levels, plus inflation, as they prepare to take in new members from the East.

To achieve this, a watered-down deal on CAP reform was agreed by European heads of government at their meeting in Berlin just two weeks after European agriculture ministers agreed radical reforms.

The leaders delayed dairy reform until 2005, although Italy, Spain, Greece, the Irish Republic and Northern Ireland will be granted additional quota from next year.

Cereal support prices will be cut by 15% instead of 20% over two years, with a further cut possible subject to review in 2002.

It is likely that set-aside, which has been agreed at a rate of 10%, will remain at that rate until 2006.

Area payments are to increase from Euro54 this year to Euro63 (£41.67 at this mornings Euro rate) in 2001.

EU linseed and oilseed area aid payments will be cut over three years to Euro63/t from the 2002 harvest onwards. This is instead of the proposed Euro66.

Total spending will peak in 2003 at Euro43.77 billion (£28.95bn), with a total of Euro297.74bn being spent over the seven-year period.

The full details of the agreement remain unclear, but should be made public next week when the Commission completes its assessment of the summit conclusions.