* Assembly wants sugar sector liberalisation delayed to 2020
* Vote forms basis of negotiating position with governments
* Member states to finalise CAP reform stance next week (Adds details of vote, reaction)
By Charlie Dunmore
BRUSSELS, March 13 The European Parliament backed plans on Wednesday to make EU farm subsidies more equitable and environmentally-friendly, as part of the reform of the bloc's 55 billion euro-a-year common agricultural policy (CAP).
The Strasbourg vote outlined the negotiating position parliament will take in talks with EU governments to finalise the CAP reform, which should begin later this month once member states have agreed their own common position.
While the appetite among lawmakers for deep reform has been tempered by likely cuts of 13 percent to farm spending in the EU's next long-term budget, MEPs stuck broadly to the reform plans proposed by the European Commission in 2011.
"Once the Council has also defined its negotiating mandate, we can begin talks to achieve a final decision by the beginning of summer that I hope will be balanced and ambitious," EU farm commissioner Dacian Ciolos said in a statement after the vote.
In one of the most closely-watched elements of the vote, the full parliament reinstated several measures to improve the environmental performance of agriculture that had earlier been rejected by its farming-friendly agriculture committee.
Farmers will have to adopt ecological measures such as crop rotation and leaving more land fallow, or lose out on a third of their direct EU subsidies, MEPs agreed.
Environmental campaigners said the parliament had avoided the worst case scenario, but questioned what effect the agreed measures would have in practice.
"We were relieved to see the hard-line anti-greening proposals by the parliament agriculture committee were rejected... but the content of the measures is so weak that it is unlikely to lead to any improvements," Andrea Kohl, programme director for WWF's EU policy office, said in a statement.
SUGAR QUOTA EXTENSION
MEPs did weaken the Commission's proposal to scrap EU sugar production quotas and minimum sugar beet prices from 2015, calling instead for them to be retained until 2020.
With several EU governments including major sugar beet producer France pushing for a similar delay, it now seems unlikely that quotas will disappear before the end of the decade.
The European committee of sugar producers (CEFS), which represents sugar beet growers, welcomed the result and urged EU governments to follow the parliament's lead.
But EU sugar users' association CIUS, which represents food and drink companies, said the decision went against a recent trend of reform and liberalisation of EU agricultural policies.
"Today's vote brings the EU back to outdated, protectionist policies of the past, which distort the market and jeopardize security of supply for the entire food chain," said CIUS Secretary General Muriel Korter.
Other elements agreed by MEPs included a 300,000 euro ($389,000)annual limit on payments to individual farmers, which would do away with the estimated 1,500 "CAP millionaires" that currently receive more than a million euros a year.
MEPs want to slow proposals to share subsidies out more evenly within EU countries according to farm size, by giving governments the option to maintain a certain level of inequality in 2019 - the proposed deadline for redistribution.
But they agreed the Commission's plans to distribute subsidies more equally between EU countries should be speeded up.
Producers in Italy, Belgium and the Netherlands currently receive more than 400 euros in direct subsidies per hectare on average, compared with less than 150 euros per hectare in the EU's Baltic states.
Airports and golf clubs would no longer be eligible for EU payments under plans to pay subsidies to "active farmers" only, although governments would be free to re-define which businesses would be excluded.
EU governments are expected to finalise their position on the CAP reform at a meeting in Brussels on March 18 and 19. ($1 = 0.7722 euros) (Reporting by Charlie Dunmore; editing by Rex Merrifield and Anthony Barker)