Brussels - European Union agriculture ministers were holding tough talks in Brussels on Wednesday over plans to gradually increase milk quotas before they are phased out entirely in 2015.

Another controversial proposal from EU Agriculture Commissioner Mariann Fischer Boel involves reducing direct payments to farmers, so that more EU money can be spent on fighting climate change, defending biodiversity and dealing with possible water shortages in the countryside.

The commission wants milk quotas to be increased by 1 per cent per year in all EU member states.

"We want a soft landing before the expiry of the quota system," Fischer Boel said in a recent interview with Deutsche Presse-Agentur dpa.

"If you sit on your hands and wait until 2015, then I think you would definitely put farmers in a very awkward and difficult situation, because then you would see that their quotas would be gone overnight and that they had no possibility to adjust to a new situation," Fischer Boel said.

But Germany and other countries with small, inefficient dairy sectors are still against increases in quotas, since they would reduce the price of milk.

Italy, on the other hand, is seeking a 10 per cent front-loaded increase in its quota since it needs more milk to produce high- quality cheeses such as Parmigiano Reggiano.

Officials said they expected the talks to drag late into Wednesday and possibly into Thursday. (dpa)