WASHINGTON - The Senate Agriculture Committee on Tuesday approved a massive five-year farm bill that would cut spending while also creating new subsidies for farmers. The legislation approved 15-5 includes concessions to Southern rice and peanut farmers, thanks to a new top Republican on the committee, Mississippi Sen. Thad Cochran. The bill eliminates $5 billion in annual subsidies, called direct payments, that are important to those Southern farmers but makes it easier for them to receive alternate subsidies if prices dip.

European lawmakers on Wednesday approved plans for a radical overhaul of the EU's Common Agricultural Policy (CAP) by capping subsidies and tying them to environmental concerns. Members of the European Parliament notably agreed a sea-change in the European Union's controversial farming subsidies -- tying 30 percent of direct subsidies to 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 arable land.

EU leaders appeared poised Friday to cut the bloc's budget for the first time in its six-decade history, with a tentative agreement to trim spending by three percent over the rest of the decade, diplomats said. After a short break following a 19-hour session lasting through the night, the bloc's 27 leaders were due to return to the negotiating table at 1200 GMT.

Farmers demonstrated in Madrid on Thursday against an overhaul of the European Union's agricultural policy in which they fear losing hundreds of millions of euros in subsidies each year. Hundreds of protesters, some dressed as cows and others in the orange T-shirts of their Union of Small Farmers which organised the demonstration, blew whistles and set off firecrackers as they marched through the streets of the Spanish capital. The farmers fear that subsidies from the European Union will be cut at a time when their revenues have fallen due to the economic crisis.