Brussels, 14/05/2008 (Agence Europe) - On Tuesday 13 May, the European Commission announced its intention to extend the suspension of import customs duties applied to most cereals, for a year. This involves a measure for diminishing tension reigning on the cereals markets (high increase in demand and price hikes). Suspending duties on imports will make importing cereals from third countries into the European Union easier.
In December, the Council adopted a resolution suspending customs duties (all cereals, except, oats, buckwheat and millet) during 2007/08 ending 30 June 2008 (EUROPE 9571). The Commission is counting on putting forward a proposal during the next management committee meeting for extending this measure till 2009.
Customs tariffs can again enter into force at any moment, if necessary. The EU, which in normal times is self-sufficient in cereals and only imports maize, was a net importer of cereals in 2007-08, following two mediocre harvests. Although customs duties were not suspended, the EU had a high price to pay for its maize and sorghum for animal feed, explained the Commission.
Other measures envisaged include the definitive eradication of the obligation imposed on farmers to leave part of their land (10%) fallow. This obligation was already lifted for sowing in autumn 2007 and that for spring 2008. Cultivating these additional 4-5 million hectares should increase production by an additional 30 million tonnes of cereals for the following year.
Between February 2007 and February 2008, prices in Europe shot up by 80% for wheat, 28% for maize, 63% for rape seed and 30% for milk. In the medium term, the Commission is expecting a stabilisation in prices to a higher level than during the previous last ten years, due to increasing production costs. The Commission is noting a stagnation in wheat yields due to lack of investment in research and environmental constraints. Prices are very advantageous for arable crops, rather good for milk, not good for pork meat, poultry and eggs but good for beef meat, explains the Commission. Biofuels have played a role in the increase in maize prices. The Commission believes that the 10% biofuels target (by 2020 in total fuel consumption in each member state) is possible if maize yields progress correctly (1%-2% a year). The Commission concludes that if these conditions are met, there will be a place for biofuels, human and animal consumption. (L.C.)