The European Union has agreed to stop buying maize its
farmers could not sell above a set price; the reason being that all grain silos
are full with unsold stocks.
Until now, the EU has bought up all the maize its farmers could not sell on
the market for more than €101.31 ($135) per tonne in order to provide a safety
net when prices slumped.
However, with maize prices soaring worldwide amid a general
commodities boom, it is mainly uncompetitive Hungarian farmers who still need
the EU price guarantees. Their production techniques are outdated and they are
quite far away from big consumer markets.
Hungarian production has driven
up the amount of maize held in EU grain silos, which are nearly brimming over
with 5.6 million tonnes in stocks and little chance of selling it profitably on
"The situation of growing
stocks was rapidly becoming untenable - as well as expensive for the EU budget,"
European Farm Commissioner Mariann Fischer-Boel said. "Farmers should be growing
for the market."
Putting an end to the price guarantee is expected to
save the EU budget about €620 million ($827 million) in purchase and storage
costs from 2008 to 2014, according to an estimate from the European
In addition to maize, the EU also offers its farmers a
€101.31 per tonne price guarantee for wheat, barley and sorghum.
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