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May 31, 2008

EU lukewarm to sharing unsused subsidies with developing world farmers

A plan for Europe to dole out some of its unused subsidies to Third World farmers got a lukewarm reception from several EU ministers who complained it would not be a sustainable or long-term solution.

The idea, floated week by European Union Agriculture Commissioner Mariann Fischer Boel, is far from being ready for publication and its details, as well as funding, are sketchy. The EU farm cash would, in theory, be sent via international organisations such as the United Nations and World Food Programme to help small Third World producers buy seeds and fertilisers.

The sums concerned are believed to be substantial, running into hundreds of millions of euros, officials say.

"It's a lot of money. Otherwise it wouldn't be worth starting the procedure," Fischer Boel said on the sidelines of an informal meeting of EU agriculture ministers, but declining to elaborate on exact levels of available funding.

So far, for the 2008 farm budget, the EU has been heavily underspending on classic market support measures such as export subsidies, public intervention buying of staple commodities and subsidised private storage.

"This is a serious amount of money but it would be kept within the agricultural sector. It would come out of the agriculture budget and be channelled through international organisations," one European Commission official said.

"We don't know how exactly it would be worked out but there would be money available for the next two years. And I would imagine we would aim to have something concrete by the European Council (EU leaders' summit in mid-June)," he said.

Agriculture eats up more than 40 percent of the EU's annual budget, which for 2008 is planned at 120.7 billion euros ($190.1 billion).

Fischer Boel's plan did not go down that well with several EU agriculture ministers attending the informal meeting in Slovenia.

"This is not a durable solution, it's maybe an emergency one," French Agriculture Minister Michel Barnier told reporters, adding that struggling Third World farmers, especially in Africa, would be best helped by an initiative based on regional similarities and geographical cohesion of countries.

"In the medium and long term, I think a good system would be to have a development policy," he said. "One dollar invested in agriculture is the most efficient way to guard against poverty."

Dutch Agriculture Minister Gerda Verburg broadly agreed, saying the EU should be looking to invest in a more "structural way" -- such as in research, while encouraging recipient governments to invest in infrastructure and regional transport.

"It (Fischer Boel's plan) is a nice idea but I'm afraid it won't work because micro-credits are only giving money," she told reporters.

"Capacity building to help the farmers in Africa and Asia to build up their own systems is more important than giving money," Austrian Agriculture Minister Josef Proell said. "You have to build a sustainable agriculture system," he said.

"And we cannot feed the world with European agricultural policy alone," Proell added.


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