A PROPOSAL to create three single farm payment zones in England is now understood to have been agreed by farming organisations.

A Tenant Farmers' Association meeting in Skipton on Wednesday was told that the rift originally caused by the idea had been healed.

It is understood the agreement which will now be put to Defra will involve a new moorland designation receiving £30 to £40 per hectare; land in the Severely Disadvantaged Area and up to the moorland line receiving £150/ha; and the non-SDA land receiving £205/ha.

The current unpopular two payment area proposal from Defra would see SDA land attract £65-£85/ha and all other non-SDA land receive £210-£230/ha.

That proposal has been widely condemned.

Farming organisations, national parks and other interested parties all warn it would lead to many typical upland family farms going out of business.

It would not only be bad for farming but also for the countryside, environment, and local rural economies.

The Country Land and Business Association and the National Farmers' Union each independently came up with the three zone idea.

However, it split industry organisations when it was first raised last week and no agreement was reached when they met again on Tuesday.

However, Wednesday's TFA meeting was told urgent talks had continued via the telephone and it was understood agreement had now been reached.

But Hugh Fell, of George F White and a TFA adviser, warned farmers not to expect to receive the actual sums, whatever was announced.

The national reserve would take off 3pc and modulation would deduct a further 11pc. The deductions would rise to 18pc from 2007 onwards.

The EU had also left itself the loophole of financial discipline. If the farm budget looks as though it will be exceeded it would make further deductions.

If the three zone system and estimated figures are accepted it would be better news for producers in the SDA's whose payment would go up from Defra's £65 to £150/ha.

It would also stop large sums going to the moors which have never attracted them in the past.

John Cresswell of the TFA warned the packed meeting at Skipton that the single farm payments would be affected by the £/euro exchange rate each year.

He also warned that there could even be a further review as early as 2009.

He and Mr Fell both said there were still many details unknown and questions not answered. They stressed the need for farmers to take great care in any decisions and to seek professional advice.

"If you thought IACS was a hassle this is going to be really complex and complicated," he said.

On Monday, Prof Allan Bucknell, CLA chief economist, addressed more than 200 members attending a roadshow at Askham Bryan College about the CAP reform..

He explained how last week's meeting in London was attended by the NFU, National Beef Association, National Sheep Association, Tenant Farmers' Association, Royal Society for the Protection of Birds, the National Trust and national park authorities.

Prof Bucknell said the meeting was unanimous in agreeing that Defra's choice of the SDA line as the payment boundary was a bad one.

It was also unanimous that there had to be at least two regions; it would not be sensible to opt for one England payment zone which Margaret Beckett, Defra Secretary of State, had originally wanted.

One alternative put forward was to keep two regions but make the boundary the moorland line.

However, the CLA and NFU had quite independently come up with the idea of three regions.

Prof Bucknell stressed that the payment figures were only rough estimates because Defra still could not provide accurate figures on which to base anything.

At the time he estimated land above the moorland line would attract £30-£40 per hectare; land between the moorland and SDA line would attract £110-£148ha; non-SDA land would receive £216/ha.

It also agreed that the farming industry must agree on proposed changes; individual parcels of land must be treated under the rules of where they were, and not be linked to the farm address or aggregated; and that further information was required.

Several upland farmers at Askham Bryan said the suggested SDA figures would make their farms unviable.