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The EU called for a greener, fairer farm policy Wednesday as it moved to radically overhaul its Common Agricultural Policy (CAP) by capping subsidies and tying them to environmental concerns.

AFP - Militants of the Friends of the Earth Europe environmental group stage a protest on October 12, 2011 in front of EU headquarters in Brussels as the EU agriculture commissioner Dacian Ciolos presents a draft reform of the Common Agricultural Policy (CAP) for the period after 2013.

"The CAP must be redefined," the European Union's agriculture commissioner Dacian Ciolos told the European Parliament as he outlined a sweeping plan to reform the EU's often controversial farming subsidies from 2014.

Among his proposals to rethink the CAP, which traditionally accounts for about 40 per cent of the bloc's annual spending of nearly 140 billion euros, is a call for 30 per cent of EU direct farm subisidies to be conditional on respect for the environment.

The measures include crop diversity, maintaining permanent pastures and creating ecological fallows that are havens for plants, animals and insects on at least seven per cent of arable land.

To even out subsidies in the interests of fairness, Ciolos wants to cap payouts to farmers at 300,000 euros ($424,000) per year. In addition, levies would be applied progressively on all payments exceeding 150,000 euros.

While highly-mechanised large farms would be hit, those using a large number of workers could win exemptions as salaries could be deducted from the handouts, according to the European Commission proposals.

Likewise in the interests of the environment, Ciolos is proposing to gradually favour extensive rather than intensive farming by progressively calculating subsidies per hectare (acre) from 2014 to 2019, rather than basing the payments on production, as is often the case.

The proposals are intended also to address squabbling between member states on their respective quotas, with newer members from eastern Europe complaining more money goes to founder states.

However, while France, currently the top beneficiary, would see a 1.5 per cent fall in the 2014-2019, it would remain the largest recipient.

Romania, Bulgaria and the three Baltic nations would see an increase -- in Romania's case of 33.7 per cent. But eastern EU members would continue to be behind the older EU members, with Latvia notably 54 per cent below the average.

"Politics, especially at the European level, is the art of what is possible," Ciolos said. "The most important thing is to launch movement in the right direction."

His proposals will have to be approved by both the parliament and all member states before taking effect.