European Union calls for more grain production
Last Updated: Thursday, September 13, 2007 | 9:43 AM ET
The Associated Press
The European Union's top agricultural official is calling for increased production of crops like wheat, oats and barley to counter widespread shortages on the world market.
EU Agriculture Commissioner Mariann Fischer Boel on Thursday urged EU governments to back a plan allowing grain farmers across the 27-country bloc to plant crops on all their fields because of low supplies and high prices.
Under rules from 1992 designed to prevent over-production, farmers are required to keep 10 per cent of their fields fallow.
Fischer Boel has recommended that rule be put on hold for one year.
"Cereals prices have hit historically high levels as the supply situation has grown increasingly tight," Fischer Boel said.
She said a poor harvest in Europe this year, combined with restrictions on crops, has led to a risky market price.
Rising prices
European consumers have seen prices rise sharply for breads, pasta and meat products in recent weeks owing to the increased cost of wheat and other grains.
Consumer groups in Italy called a one-day strike on buying pasta Thursday to protest against the higher prices.
EU spokesman Michael Mann said he hoped EU governments would back the measure later this month so farmers now planting this year's winter grain crops can expand their work.
Mann said the European Commission believes the measure could yield about an extra nine million tonnes to overall EU output.
This year's grains crop is expected to be well below last year's yields of 241 million tonnes, which in itself was lower than normal.
Officials said dry, hot weather in April combined with a wet summer in western Europe and heat waves in southeastern Europe, led to low crop yields.
They also point to historically low levels of grain stocks in Asia, North America and elsewhere.
The EU's reserve grain stocks dropped dramatically from 12.7 million tonnes to below a million tonnes over the past year as officials tried to meet the shortages. The U.S. Department of Agriculture said Wednesday that U.S. stockpiles are also at their lowest level in 33 years.
There is also increased pressure on stocks as more cereal and grain crops are used for biofuels like ethanol, a popular and profitable crop for farmers, especially in the United States and Canada.
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