July 21, 2008
EU proposes major food aid package but plan faces opposition
The European Commission Friday (July 18) proposed donating EUR1 billion in unused European Union funds to farmers in poor countries as a one-off measure to help them tackle spiralling food prices.
The special "facility for rapid response to soaring food prices in developing countries" would come from funds left over from the EU's agriculture budget and would operate for two years, the EU's executive arm said.
The plan faces major opposition from some EU countries because the surplus farm money is usually used to reimburse those that contribute most to the bloc's coffers.
If endorsed, it would improve the access of farmers to fertilizer and seed, and help them boost production capacity. The funds would be paid out through international organizations.
"This EUR1-billion facility aims to generate a strong and rapid agricultural supply response," commission President Jose Manuel Barroso said in a statement.
"It is an act of solidarity with the world's poorest but also a responsible measure to promote stability," he said.
The EU's Common Agriculture Policy's finances are currently brimming with surpluses because high prices for food products has made it unnecessary for the EU to ensure minimum prices through buying up excess supplies.
When asked about the commission plan, French Agriculture Minister Michel Barnier on Tuesday (July 15) said it is "very ambitious, very important, new."
But at a meeting Thursday of EU budget ministers, "many member states raised concerns" about the commission plans, an EU official said.
At a G8 summit in Japan this month, German Chancellor Angela Merkel, whose country contributes most to the EU budget, expressed clear doubts.
"We haven't had the last word on this," she warned.
Despite the objections, the commission hopes to win the support of the 27 nations and the European Parliament by November so that the funds can be made available next year.
