TYPICAL medium sized British family farms will be hard hit by proposed changes to the Common Agricultural Policy.

Their annual EU subsidy would be cut by up to 20pc over six or seven years.

And the estimated 600 British farms of more than 2,000 acres would be restricted to just under £200,000 a year.

The money saved would go to part-time and peasant farmers in southern Europe.

Reaction to Wednesday's announcement by Franz Fischler, European agricultural commissioner, was mixed, with farming organisations claiming British farmers would be unfairly discriminated against.

However, Margaret Beckett, secretary of state for Defra said they did not go far enough.

Speaking at the Great Yorkshire Show Mark Hudson, deputy president of the Country Land and Business Association, defended the large farms.

They often played a key role in the rural economy and were often better placed to provide jobs and carry out environmental works.

Ben Gill, NFU president, accepted the CAP must change - but not to the detriment of British farmers.

"These proposals are a huge issue for British farming and today's announcement marks the start of a critical process," he said.

The NFU would carefully study the proposals. Ensuring each farm received a fair allocation was critical.

Mr Gill was due to meet Dr Fischler yesterday for discussions.

Meanwhile, Mrs Beckett welcomed the proposals to switch the money from production-linked aid to wider rural development.

"However, the proposals do not go far enough," she said. "They do nothing to control the burgeoning growth in the budget because they simply recycle money in the agricultural budget.

"We need year-on-year savings in the cost of the CAP."

The UK would play a constructive role in the hard bargaining ahead.

The target date for final agreement is next spring, with implementation of the reforms not expected before January, 2004.