After concessions given by EU Agriculture Commissioner Mariann Fischer Boel, most notably to France, Germany and Italy, ministers struck an early-morning deal that still represents Europe's most significant farm reform in five years.

The policy revisions will start in 2009 and run until 2013.

'It was a qualified majority, not unanimity,' said the official, who did not say which country or countries in the 27-nation bloc had not backed the accord during all-night talks.

Apart from arguing over how much to divert handouts into countryside funding, the main hurdles were how to liberalise the EU dairy sector before milk production quotas expire in 2015, public purchasing of key commodities like wheat and the future of the EU's remaining production-linked farm subsidies.

All holdings, subject to a basic threshold of 5,000 euros (S$9,647) in subsidies a year, will shift 5 per cent of their EU farm money into countryside projects by 2012 - Fischer Boel had wanted 8 per cent - on top of a compulsory 5 per cent already in force.

Much of her vision of applying a tiered system of annual income thresholds to shunt subsidies, in progressively higher amounts, from larger farms into rural spending also got diluted.

Instead of three thresholds for farms receiving subsidies, only one will now apply - 300,000 euros and higher, where 4 per cent of subsidies will be moved into rural projects by 2012. -- REUTERS