July 19, 2007

EU to end set-aside rules in face of rising grain shortage 

The global grain shortage has forced the European Commission to propose scrapping a rule that prevents farmers from planting crops on one tenth of their land.

Concern about tightening supplies of important food crops, such as wheat and barley, has prompted Marianne Fischer Boel, the Agriculture Commissioner, to propose ending the rule in the forthcoming planting season.

Soaring wheat prices and an expected weak cereal harvest are causing concern in Brussels. Worldwide, cereal stocks are expected to fall to 111 million tonnes in 2007-08, their lowest level in 28 years.

Furthermore, the EU's buffer stocks have shrunk from 14 million tonnes in 2006-07 to just 2.5 million tonnes.

Poor harvests, droughts and competition for cereals from the biofuel industry have caused a grain shortage on a global scale.

The commission believes the new rule would add 10-17 million tonnes of grain next year to the EU market, easing the shortage. Some 3.8 million hectares of EU farmland is under obligatory set-aside.

The rule was introduced in 1992 as a reform to the CAP, intended to deal with the growing costl associated with a huge excess of EU grain.

Farmers get the same payments from the Common Agricultural Policy (CAP) for arable land, whether it is farmed or not, under a reform known as the single payment scheme, which was agreed in 2003.