Overeenstemming over landbouwhervormingen Zuid-Europa (en)

After 20 hours of negotiation, agriculture ministers early this morning agreed to reform the EU's olive oil, cotton and tobacco sectors.

According to reports, the deal will mean that some subsidies are no longer linked to production, theoretically reducing incentives for overproduction.

Concerns over the social consequences of funding tobacco production and harming cotton producers from developing countries appear to have marginally outweighed the economic interests of France, Grecce, Italy, Portugal and Spain.

Many developing countries are dependent on cotton and tobacco, and olive oil is a staple of the Mediterranean economy as well as the diet.

Caps

The move mirrors one made last year when Agriculture ministers agreed to break the link between production and subsidies in the EU's Common Agricultural Policy - olive oil, cotton and tobacco were excluded from that agreement.

Reforms of these sectors will come into effect in 2006 although major exceptions apply.

There will be a transition period for tobacco producers, 60 percent of aid will still be tied to production, falling to zero by 2010.

Some 35 percent of cotton aid and 40 percent of olive oil aid will still be based on production levels for the foreseen future.

The EU's agriculture budget of almost 50 billion a year - half of the total budget - will not be affected.