News last update:6 Aug 2012

Fallow land in use to halt grain price rises

The long expected marketing measure to let EU farmers re-use the 3.8 million hectares of set aside land was proposed by the European Commission on Thursday.

A rule obliging farmers to leave 10% of their land unexploited in order to limit cereals production will be scrapped until the Spring harvest next year, under plans presented by the Commission on 13 September.

The proposal, which needs approval from EU farm ministers and the European Parliament at the end of the month, comes in response to low cereal stocks that have pushed prices to historically high levels.

"Intervention stocks have shrunk from 14 million tonnes at the beginning of 2006/2007 to around 1 million tonnes now in September, mainly composed of maize held in Hungary.

"Reducing the set-aside rate from 10% to 0% is expected to increase output by at least 10 million tonnes," the Commission said in a statement.

Temporarily scrapping the set-aside rule would also prevent the same situation from recurring next year, it added. "A poor 2008 harvest combined with 10% set-aside would expose the internal market to potentially serious risks."

Bad weather was largely blamed by the Commission for the high prices: "The 2007 cereals crop is now estimated below last year's level because of dry and unusually hot weather in April followed by adverse summer weather in western member states and drought and heat-waves in the southeast of Europe."

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