17 November 1998
EU cereal reform fails to impress

By FWi staff

CEREAL farmers across Europe remain unimpressed by European Union plans to reform production – despite the fact that the proposals will add more than Ecu1bn ($1.165bn/£700m) to the cereals budget, according to an article in the Financial Times.

The reform proposals include a 20% cut in guaranteed prices. Other measures include changes to set aside and the ending of higher direct subsidies to oilseed farmers.

The commission believes it is acceptable – and politically possible to achieve – the price cuts, given that many cereal farmers have done very well out of the last round of reforms in the early part of the decade.

Cereal crops are heading for massive over-production but the commission hopes that farmers would be able to sell more outside of the European Union by cutting guaranteed prices by a fifth,.

The changes to set-aside are judged to be the “least contentious”. But the Financial Times envisages the biggest battle will be the plan to cut oilseed payments to the level of other crop subsidies.

Oilseed reform is forecast to take place gradually in the face of opposition of some members fearful of the repercussions of such a move. Spain and Portugal, in particular, fear their sunflower growers would turn to crops already in surplus.

  • Financial Times 17/11/98 page 36