FACTBOX-Main elements in EU farm policy reform deal
(Updates factbox issued on June 25)
LUXEMBOURG, June 26 (Reuters) - European Union negotiators agreed sweeping reforms to the bloc's 50 billion euro ($65 billion) a year Common Agricultural Policy (CAP) on Wednesday, liberalising sugar production starting from 2017 and cutting subsidies to the largest farms.
The overhaul is intended to make the 50-year-old common agricultural policy (CAP) fairer and more environmentally friendly, to justify the huge sums paid to Europe's farmers each year.
The deal must now be rubber-stamped by governments and the European Parliament before it can enter force at the start of 2014.
Following are the main elements of the deal, based on details from the European Commission and EU officials:
* Direct subsidy payments, which provide a basic level of income support to farmers, will account for three-quarters of the annual EU farm budget.
* Subsidies will be shifted from large farms to struggling smaller producers. To offset the impact on big farms, governments can limit losses by individual producers to 30 percent of current subsidy levels.
* Governments can link up to 15 percent of subsidies to production levels for cereals, livestock and dairy to ensure that farming continues in marginal areas such as uplands.
* Negotiators agreed that 30 percent of future direct payments will depend on farmers' taking new steps to protect the environment. Those that do not will face fines from 2017.
From 2015, farmers will be forced to leave 5 percent of arable farmland fallow as a haven for wildlife, possibly rising to 7 percent in 2017 depending on proposals from the Commission.
Arable farms over 30 hectares must grow at least three different crops, with no single crop covering more that 75 percent of farmland.
* Certain landowners will not be eligible for subsidies in future, including airports and golf courses.
MARKET MANAGEMENT MEASURES
* Existing market tools, such as public intervention and private storage aid, will be kept as a "safety net" to help producers cope with food crises and other market disruption.
* EU sugar production quotas and minimum sugar beet prices will be abolished from Sept. 30, 2017. Measures to help EU beet growers adapt to the end of quotas.
* All three institutions want to maintain automatic public intervention for wheat, butter and skimmed milk powder. The intervention price for wheat will remain fixed at 101 euros per tonne, up to a maximum of 3 million tonnes annually.
* New public-private funded risk management tools including crop and weather insurance and mutual funds will help to cover loss of income. The latter would refund up to 70 percent of losses if farm incomes were to drop by 30 percent or more.
* At least 30 percent of the 12 billion euro-per-year rural development budget should be spent on environmental protection measures. ($1 = 0.7612 euros)
(Reporting by Charlie Dunmore and Nigel Hunt; editing by Jane Baird and Anthony Barker)