EU agriculture ministers have reached agreement on changes to the Common Agricultural Policy.

It follows all-night negotiations in Brussels to review the system of subsidy payments to farmers.

President of the Irish Farmers' Association Padraig Walshe has criticised the decision to cut the single farm payment by 5% over five years.

Speaking on RTÉ Radio, Agriculture, Fisheries & Food Minister Brendan Smith said that despite difficult negotiations, it was a good package for farmers in Ireland.

Ministers at the talks agreed to sweep away various established agriculture support schemes, including diverting subsidies from large farms to countryside preservation schemes.

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.

Commissioner's plans diluted

'It was a qualified majority, not unanimity,' said an official, who did not say which country/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 in subsidies a year, will shift 5% of their EU farm money into countryside projects by 2012 - Ms Fischer Boel had wanted 8% - on top of a compulsory 5% 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 and higher, where 4% of subsidies will be moved into rural projects by 2012.