Expressing disappointment over the recent EU proposal of diluted farm reforms, FICCI on Friday said such a package would not serve the cause of the Doha mandate on agricultural negotiations.

"Such a watered-down compromise reform package will not serve the cause of the Doha mandate on agriculture negotiations," FICCI said in a statement.

Of the total support given to EU farmers during 2000-02, 61 per cent was in the form of market price support and payments based on output which were considered to be production distorting, FICCI said

It suggested that EU should go ahead with significant reductions in such payments and substituting them by non-production distorting payments.

Reductions of production distorting subsidies has to be coupled with a sharp reduction in market price support to enable the EU farmers to respond to market signals rather than to any pre-determined price.

The chamber called on the European Commission to adopt a package of 'genuine, serious reforms in the overall interest of multilateral trade negotiations.'

Another cause of concern was the high level of export subsidies extended by EU to agricultural products, which adversely affected the Indian business interests.

The chamber expressed fear regarding domestic agri-products being hit in third country markets due to the entry of heavily subsidised EU products in these markets.