Brussels to divert €1bn of EU farm cash to help developing countries

Around €1bn (£800m) of unused EU farm cash is to be diverted into a special “rapid response facility” to help farmers in developing countries lift their food production.

The plan is set out in an EU Commission proposal issued on Friday (18 July), to combat the effects of rising world food prices, which have pushed hundreds of millions of people in developing countries into deeper poverty.

The money was supposed to have been used for EU farm support policies such as intervention purchasing and export subsidies.

But high commodity prices mean that market expenditure has been much lower than expected.

zimbabwean farming

The new fund will allocate €750m to 2008 and €250m to 2009, with the money used to improve access to farm inputs such as seed and fertiliser in least developed countries.

But the legislation still has to be approved by EU agriculture ministers and the European parliament, so the actual cash is not expected to start flowing until early 2009.

“While all developing countries are potentially eligible for support, assistance will be provided to those that are severely affected by the food price crisis in socio-economic and political terms,” said a commission statement.

EU Commission president Jose Manuel Barroso said it was “an act of solidarity with the world’s poorest, but also a responsible measure to support stability”.

Rising food prices had resulted in riots, unrest and instability in several countries, risking the gains of years of political, developmental and peacekeeping investments.

The €1bn fund will be in addition to some €800m already earmarked for aid for developing countries.

The €1.8bn for 2008/09 will mean the EU is putting up 10% of the estimated €18bn needed by developing countries to combat the global food crisis.