Brussels, 18/07/2008 (Agence Europe) - On Friday 18 July 2008, the European Commission published a draft regulation to set up a rapid reaction fund to deal with high food prices in developing countries. The fund will have a budget of €1 billion (€750 mil in 2008 and €250 mil in 2009), provided from un-used funding in the EU's farm budget (see EUROPE 9704 for details).
The brainchild of EU Development and Humanitarian Aid Commissioner Louis Michel and Agriculture Commissioner Marianne Fischer Boel, these new resources will supplement the existing development aid for the developing countries that are the hardest hit by the global food crisis according to objective criteria. As a priority, it will fund measures to improve the supply of food, help provide access to farm inputs like seed and fertilisers and provide a security aspect to improve agricultural production.
High farm prices have led to a fall in spending on market support in the EU's budget for 2008, with lower sums earmarked for 2009 as well and the Commission believes that this provides a one-off opportunity to create a temporary fund to provide real time answers to the crisis. Commenting on the proposal, a European Commission spokesperson, Johannes Laitenberger, said it was a single injection of funding to stimulate farming in developing countries, particularly Africa, to tackle the medium-term structural causes of the food crisis. He said the fund was an expression of solidarity with these countries and had the aim of stabilising global food markets, which would therefore also benefit the European market.
The draft regulation will be submitted to the Council and Parliament and will be adopted by the Budgetary Authority through the codecision process. The Commission hopes agreement will be reached by November 2008. Asked about the criticisms of the proposal by the European Parliament's Budgetary Committee and several Member States in the absence of any review of the EU budget (see EUROPE 9706), Laitenberger said that after examining the various options, the Commission felt that the proposal conformed with the existing framework as long as the Budgetary Authority made the decision. In drawing up the proposal, the European Commission was responding to a request from the June 2008 European Council. (A.N. transl fl)