ON the eve of his departure for Brussels for talks on reforming the Common Agricultural Policy, Scottish Office Agriculture

Minister Lord Sewel has emphasised the need to secure an

outcome which will form a sound basis for World Trade Organisation talks at the end of this year.

Speaking at a news conference in Edinburgh, he said: ''It is in everyone's interests to have an outcome which is sustainable in the light of what is likely to happen with the WTO. We don't want two major adjustments following each other fairly quickly.''

Lord Sewel said the UK had taken the view that the European Union should be prepared to look at radical options in the context of CAP reform so that the whole business did not have to be re-opened as a result of WTO talks.

There were areas, he noted, where the Commission proposals did not go far enough. In the dairy sector, the Commission proposal to keep milk quotas in existence until 2006 seemed too timid.

The dairy sector was being hampered by quotas which

prevented it from increasing production for sale outwith Europe.

Agriculture Commissioner Franz Fischler has indicated that he is anxious to secure agreement on the reform package by the end of next week, and Lord Sewel accepted that the UK delegation would have to be vigilant in order to defend its farmers' interests.

He pointed out that as they stood, the proposals would mean a #100m increase in direct

payments for Scottish farmers.

However, the Government is supporting the concept of

payments being gradually scaled down as the EU tries to reduce the overall agriculture budget, which runs at about #30bn a year.

It was accepted, he said, that a key issue for the UK would be the beef regime. European producers which operated intensive production systems were keen to redress what they saw as a bias in favour of extensive systems which were more prevalent in the UK.

For the beef sector, the

Commission is proposing a reduction in intervention prices with 80% compensation in the form of direct aid. That would come partly through an increase in Beef Special Premium and Suckler Cow payments.

The balance would come in the so-called national envelopes which would allow top-up on these premium payments.

George Lyon, president of the National Farmers' Union of

Scotland, will be in Brussels with fellow office bearers for the negotiations.

He said yesterday he was not enthusiastic about support

payments being reduced but the principle of gradual reductions across the board was preferable to ''capping'', which would have a disproportionate effect on the UK.

One aim of the UK unions would be to secure an increase in the base area on which arable aid payments were calculated, said Lyon. A side effect of the BSE crisis was that more land had been converted to cereals, increasing the likelihood of exceeding existing limits for cereal production.

In the beef sector, he said, there was a case for increasing the size of the reference herd for premium payments. With no prospects of calf exports being resumed for the next few years it was essential to create a scenario in which more cattle would qualify for support.

The union view remains that the proposed 15% cut in intervention price for milk is too high and it will be pressing for that figure to be scaled back to 12%.