November 9, 2009

EU farm group urges opening of grain intervention

Copa-Cocega, an European farm group made up of farmers and their cooperatives, have called onto the European Commission to open up the intervention stores to this year’s grain crops in all member states because of the grain marketing crisis.

EU grain prices have hit rock-bottom after two large global harvests rebuilt world stocks and kicked barley prices to below intervention levels, with wheat following close behind, said Copa-Cocega.

Production costs are also on a rapid increase, with credit becoming an issue while animal feed demand has dropped, it said.

This is a potential crisis for the EU grains market, and it is crucial that grain producers are ensured of profitability, with food security at risk and Europe in a recession, said Paul Temple, chairman of the Copa-Cogeca working group on grains.

Temple warned that global grain stocks were relatively low so any loss of production this year, combined with a weather event, would cause volatility and a sharp hike in grain prices.

This would have a ripple effect across the supply chain, said Temple.

Growing at below the cost of production is unsustainable and it hurts crucial investment and environmental care, he said.