The NFU, which represents employers in the Agricultural Wages Board talks, said it has secured a 15-month package starting in July 2003.

The talks resulted in the abolition of the Starter Rate and a new Harvest Worker category available for 30 weeks a year - a key victory for the NFU.

The cost of the deal is estimated at £88 million over 15 months or £70m over 12 months. Under the agreement, there will also be an extra day's holiday.

NFU employment and education chairman Bob Fiddaman said: "The new approach of the board to determining the Agricultural Wages Order is a positive and constructive development. "We think the deal takes the industry forward and is a fair outcome for all parties. We are particularly pleased with the addition of the Harvest Worker category which will be of major benefit to the horticulture sector."

Substantial changes were made to the make-up of the AWB at the end of last year, including the appointment of two new independent panel members, one of whom was appointed as chairman.

The Agricultural Wages Order for England and Wales will come into force in July 2003. The harvest worker rate will be £4.30 an hour from July and £4.50 from October. Standard worker rates will rise to £5.10 an hour in July and by another 5p in October.

There will be separate negotiations for Scotland and Ireland.

The agreement was described by the Transport and General Workers Union as a real disappointment and disincentive to keep workers in the industry.

"This settlement sends out all the wrong messages on valuing farm workers’ skills," said Peter Allenson, T&G national secretary for agriculture. "On the same day that the construction industry agreed a 23% deal to take basic rates to £9 in response to skills shortages, the farm employers have taken a backward step. We are bitterly disappointed that they have missed this golden opportunity to both improve the sub-standard rates of pay in the industry and reward the significant productivity gains."

"The concessions we made have not been repaid," continued Allenson. "We do not want to see a drain of workers from the countryside but the feelings of anger and frustration cannot be underestimated. The T&G is determined to re-double our efforts to win the hearts and minds arguments and organise to win for our members."