FARMERS were warned that they could see their new single farm payments unexpectedly reduced under the new CAP regime.

If the Commission thinks the EU farm budget will be overspent, it may reduce individual payments by 2pc.

"If the budget is underspent you would get it back but, if the budget is bust, a proportion will be kept back to ensure the budget is met from your single farm payments," said Duncan Sinclair, MLC beef specialist.

He described the mid-term CAP review as the most radical change in policy since Britain joined the Common Market in 1973.

"Although we do not have the detail, there is probably enough of a flavour for you to start thinking how you may change your business for the new climate you are going to face," he said.

It was certain that the UK would start the single farm payment scheme from January 1, 2005; headage payments would run until the end of 2004. In England, full decoupling would break the link between subsidy and production.

"There will be no specific requirement to keep any designated number of livestock, which is a very big difference," said Mr Sinclair, "It will be up to you how many you keep."

Scotland and Wales could, in theory, choose different portions because of devolution. They did not have to make any announcements until 2004.

Mr Sinclair said English farmers could start planning on a largely decoupled basis. It gave them an opportunity to re-evaluate their farm business and see which enterprises were likely to be sustainable in the long term and which were a drain on the business.

It was an opportunity to change the farm business radically, he said, and was a chance to get off the treadmill of rules and regulations.