European Union ministers are struggling to rescue the farming industry from collapse without adding to the 15-nation bloc's US$50 billion (HK$386 billion) a year bill for farm subsidies. From the tobacco plantations of Greece to the dairy herds of the Irish Republic, farmers are facing bankruptcy through over-production and falling demand. The ministers look likely to agree upon a policy which would see a 30 per cent cut in guaranteed crop and livestock prices paid direct to farmers, despite strong opposition from Spain, Greece and Portugal. However, the most serious disagreement stems from a concerted push by Germany and other net contributors to the European budget to reduce the amount they pay into the EU. But European Commissioner for Agriculture Franz Fischler told a meeting of the National Farmers' Union in Britain this week that change would not come cheap. 'Governments have to realise that if they want a fitter, leaner, more competitive agricultural sector then it is going to cost money. On the other hand, reform will bring a major overall economic gain both to farming and consumers,' Mr Fischler said. 'It is quite clear that the status quo is going to take us in one direction only: that is food mountains, lower production quotas, falling farm incomes and rural depopulation.' The Asian economic crisis has contributed to a collapse in foreign demand for European agricultural produce and brought stiffer competition from imports. 'We are facing the lowest farming incomes since the 1930s and most people will lose money this year. A lot of people are worrying whether the industry will continue into the next millennium,' Tim Bennett, who farms dairy cattle in North Wales, said after Mr Fischler spoke. British farmers have seen such a drop in the price of pigs, sheep and cattle that it is not worth taking them to market. Livestock are being slaughtered and thrown into landfills. Mr Bennett, the farmers' union vice-president, predicted that the face of the European continent could change radically, with land that had been used for agriculture for centuries left fallow or turned over to other uses. 'If we do not see an upturn in incomes within the next 12 months then the countryside will be damaged beyond repair. Society will lose the people with countryside skills to care for the rural areas and they will not be replaced,' he said. The root of Europe's agricultural problems lies in the conflicting needs of farmers operating in vastly differing conditions. France, the biggest farm producer, is chafing at limits on production and exports set by European quotas. The country's farm workforce has fallen by half in the past 30 years so that only 1.5 million people are now employed on the land. But many French farmers would accept lower prices if they were freed from limits on how much they were allowed to produce. Italian farmers have paid enormous fines for breaching EU milk production quotas and are anxious to get rid of the cap on output to allow them to compete with farmers in northern nations whose costs are higher. Spain and Portugal are anxious to see continued subsidies to help their mostly peasant farmers continue operating small farms despite competition from larger, more commercially viable farms in more developed countries. The European Commission has suggested a new agricultural policy which would see up to 25 per cent of the farming subsidy paid direct to governments instead of to farmers, so it could be used in a more effective way. Agriculture ministers have pledged to devote their next full meeting on February 22 to cobbling together an agreement which could be accepted at a summit of European leaders next month.