May 19, 2008

EU to end milk production quotas and set-aside rules

The European Commission will unveil this week a proposed shake-up of the EU's common agriculture policy to lift output in the face of a food crisis, with Britain and France gearing up for battle over hand-outs for farmers.

The Agence France-Presse reported that the proposals would phase out milk quotas and scrap rules on keeping land fallow in order to encourage more production.

Although the proposals are likely to ensure a fierce debate, the EU's executive arm has already had to water down an early plan to cap handouts to the biggest farms in the face of British and German criticism.

The proposals will next go to member states and the European Parliament to consider in the second half of 2008, when France -- the biggest recipient of EU farm subsidies -- holds the bloc's rotating presidency.