He has vowed to fight for tougher moves to wean farmers off support, as part of a massive overhaul of Europe's costly Common Agricultural Policy (CAP).
After late-night talks in Brussels, Mr Paterson insisted that the future CAP must centre on reducing EU support for the market – and making agriculture more competitive, rather than being propped up by taxpayers.
He said he had successfully resisted bids from some European farm ministers to extend the use of support for the market in a modernised CAP and added: "I'm pressing for further progress towards an open market that makes farmers less dependent on subsidies."
Last week, after a first vote on CAP reform by MEPs, lobby groups warned of a return to the "bad old days" of costly food mountains and lakes of unwanted wine and milk, unless the direct link between subsidies to farmers and production was broken. But after two days of talks between agriculture ministers, the stage is set for marathon joint negotiations, steered by the current Irish EU presidency, in the hope of a final deal in June.
Mr Paterson made clear he would continue fighting to de-couple the link between farm subsidies and food production – something that happened in this country eight years ago.
The biggest complaint about the CAP for decades was the way it encouraged food production regardless of demand, because of a system of open-ended subsidies which simply generated warehouses full of rotting "intervention" produce.
Successive reforms have effectively ended the situation – but the UK and a group of other countries say more must be done to make the sector self-supporting and competitive.
But they were outvoted overnight when a majority of ministers agreed that the share of CAP cash subsidies linked to production should actually increase.
Mr Paterson said the UK, which had done most to de-couple payments, would fight a move which would allow up to 12% of subsidies from the farm budget to continue to be coupled payments.
But he welcomed an agreement that national authorities, such as the devolved UK governments, should have more control to shape proposed CAP "greening" measures to regional needs.
