* Wheat farmers win change to reviled export quotas
* Gov't says 7 mln tonnes needed for domestic market
* Implementation of new system will start this month (Adds comment from minister, context)
By Juliana Castilla
BUENOS AIRES, Jan 5 (Reuters) - Argentina will reform its unpopular wheat export quota system that farmers say eliminated competition among buyers and depressed local prices, Agriculture Minister Norberto Yauhar said on Thursday.
The government intervenes in wheat and corn trade now with incremental export quotas and subsidies to local millers, which are aimed at guaranteeing affordable food supplies in high-inflation Argentina, a major global grains exporter.
The new scheme will keep a cap on total exports to ensure sufficient domestic grain supplies, but it will eliminate the gradual quota system in a bid to improve prices for farmers.
"The agreement basically is to set aside the 7 million tonnes that Argentina needs ... and all the rest will be at farmers' complete disposition to sell however they like," Yauhar told reporters after meeting with wheat industry officials.
He said the new system will be implemented starting in late January with the announcement of the bulk of remaining 2011/12 wheat export authorizations.
The minister estimated 2011/12 wheat output at between 13 million and 14 million tonnes, above the government's official estimate of 12 million tonnes.
Argentina is a leading global supplier of wheat, with neighboring Brazil topping the list of buyers. (Additional reporting by Hilary Burke; Editing by Bob Burgdorfer)