- Title: BELGIUM/FILE: EU executive endorses farm aid plan for Africa
- Date: 18th July 2008
- Summary: (W3) MOGADISHU, SOMALIA (FILE) (REUTERS) VARIOUS OF DEMONSTRATORS IN BAKARA MARKET YOUNG MAN RUNNING IN STREET WITH SACK OF FOOD/ PEOPLE RUNNING ON BACKGROUND (AUDIO OF GUNFIRE) TRUCK SPEEDING ALONG STREET
- Embargoed: 2nd August 2008 13:00
- Topics: International Relations
- Reuters ID: LVAAMZASVIXHO1G38DXK9OW6MZBA
- Story Text: The European Commission announced in Brussels on Friday (July 18) that it wanted to hand over 1 billion euros of unspent EU money to the developing world to help it deal with soaring food prices and to finance schemes to boost their output.
It would be a one off payment and cover next year, 2009. This year's amount could be given retrospectively from mid-June.
"Today the European Commission has formerly adopted the proposal to establish a special facility for rapid response to solving food crisis in developing countries. This proposal foresees a fund worth a billion euros to be operational for 2008 and 2009. This money will supplement existing development funds and would be taken from unused money from the European Union's agricultural budget," said EU spokesman Johannes Laitenberg.
He added that the food crisis was affecting Europe as well.
"Due to the increase in the price of agricultural products we are facing a specific situation this year. One part of the agricultural budget is not being used and we estimate that it is possible to use this money to face another problem in agriculture at the global level but which also has repercussions in Europe," Laitenberg said.
But at least eight EU member countries, including Britain, Sweden and the Netherlands, have questioned the legality of the scheme but have not challenged the merit of the idea.
EU ministers and the European Parliament, which has also voiced doubts about using unspent EU farm funds, will have to agree to the plan before it can enter into force. The Commission would like cash to start flowing in early January 2009.
"There's a fairly broad consensus on the need to act here, given the crisis which is taking place," Laitenberger said.
If approved, the money will be channelled to developing countries through international or regional organisations, such as the United Nations and World Food Programme.
Four areas of financial support are envisaged, the main two being to improve access to farming "inputs" like fertilisers and seeds and ways to improve agricultural capacity and production.
But the most difficult debate may come after the summer: how to set eligibility criteria for recipient countries and how much cash will be allocated by country. Those negotiations should be concluded by December, the Commission says.
Criteria are expected to include how much food a country produces to feed itself, its political stability and social vulnerability, its level of food price inflation and reliance on food imports -- including shipments of food aid.
So far, for the 2008 farm budget, the EU has been heavily underspending on classic market support measures such as export subsidies, public intervention buying of staple commodities and subsidised private storage, EU officials say.
Agriculture eats up more than 40 percent of the EU's annual budget, which for 2008 is planned at 120.7 billion euros.
Advocacy group DATA, which campaigns to eradicate extreme poverty and AIDS in Africa, welcomed the proposal as a way for the EU to help struggling African farmers.
"This proposal is significant and is a serious downpayment by Europe to help smallholder farmers in Africa fight back against hunger and poverty," DATA Executive Director Jamie Drummond wrote in an email sent to Reuters.
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