EU sees farm price recovery after short-term hit from crisis

Farm prices in the European Union will remain depressed in the near term due to the global economic crisis but will recover by 2015, helped by growing demand for food, increased use of biofuels and slowing farm productivity growth, the European Commission said in a report Tuesday (March 17).

The price of everything from corn to pork to milk has fallen steeply since reaching record highs in the first half of 2008 as consumers shift their eating habits to cope with the economic downturn, the commission, the EU's executive arm, said in its report.

"While the agricultural sector is generally more resilient to economic crises than other sectors, it is expected to face great challenges, especially in demand growth and farm income," the commission's report, which examines the state of agriculture markets to 2015, said.

Farm incomes are expected to rise 7.5 percent by 2015 compared with 2007 levels, though the vast majority of these gains will occur in the newer members of the EU, where farm incomes are expected to rise 49.8 percent due to increased EU farm subsidy payments, the report said.