Europe's agriculture chief outlined her vision on Tuesday for post-2013 farm policy, stressing the need to keep funding countryside development by better targeting and redistributing direct subsidies to farmers.

In her first indication of possible policy changes, EU Agriculture Commissioner Mariann Fischer Boel said while the size of farm spending after 2013 remained unknown, rural development was likely to stay a top policy priority.

Diverting more cash into such projects would probably lead to some redistributing of subsidies among farmers, regions and governments -- a difficult prospect for some EU countries to accept, she told EU ministers at an informal meeting in France.
 
'Whatever size the CAP budget may be after 2013, I find it hard to imagine that we will give a smaller slice of the cake to objectives which we ... associate with rural development policy. The opposite seems much more likely,' she said.

The European Union's Common Agricultural Policy (CAP) eats up around 44 billion euros ($64.5 billion) a year, a hefty chunk of the bloc's entire annual spending.

Of the CAP budget, rural development payments account for around 25 percent.

EU farm spending is fixed until 2013, when the bloc's next budget period will begin. By that time, however, Fischer Boel -- a former farm minister for her native Denmark -- is not expected still to hold the office of EU agriculture commissioner.
  
While direct farm payments were a relatively simple system to support EU farmers' incomes and achieve environmental goals, they did this in a fairly untargeted way, Fischer Boel said.

But that could be improved by making direct aid payments more conditional on environment standards, she suggested in a veiled hint in her speech to the EU's 27 farm ministers.

'If we move the current balance towards more targeting, that would almost certainly mean a distribution of CAP funding between farmers, regions and member states,' she said. 'For some, this would not be an easy political pill to swallow.
 
'Nevertheless, in terms of public opinion, I think this is the way the wind is blowing ... I suspect that we will have to show more clearly than ever before what results the CAP is delivering -- results that the public supports and wants.'    

Fischer Boel is already trying to promote rural development spending by proposing increased channelling of direct farm payments in her 'health check' of the CAP, in effect a mini-reform, and now under discussion by agriculture ministers.

Her idea is to trim handouts to large farms by siphoning cash, via a tiered system of income brackets, and channelling it into rural development schemes: a concept known as modulation.

Diplomats say it will be one of the trickiest areas in the reform negotiation. The tiering system would also effectively trim the income of big landholders, although all sizes of farm holding would be hit by progressive annual cuts in subsidies.-Reuters