EU seeking quick solution to plunging cereals, milk supplies
Thursday, 20 September 2007
PORTO, Portugal, Sept 19 (AFP): EU agriculture ministers are growing anxious to ramp up cereals and milk production as farmers, who are used to an output glut, struggle to keep up with soaring demand and prices.
Global grain prices have jumped about 50 per cent in a year while milk prices have risen 30-40 per cent amid a worldwide agricultural commodities bull market.
For years, Europe has produced more grain and milk than it needed, leaving the European Union to buy up the excess and discourage more production in order to avoid prices from collapsing and farmers from going out of business.
However, that long-standing situation has rapidly reversed amid the global commodities boom, driven by surging demand in fast-growing developing countries such as China.
The increasing use of farmland to grow crops for biofuels has added further pressure on what has become a tight market, driving food prices ever higher and pinching supplies for raw ingredients.
In hope of boosting supplies, farm ministers are preparing to take one of the few steps available to them next week and suspend a rule requiring 10 per cent of fields to be left fallow for a year.
Global grain prices have jumped about 50 per cent in a year while milk prices have risen 30-40 per cent amid a worldwide agricultural commodities bull market.
For years, Europe has produced more grain and milk than it needed, leaving the European Union to buy up the excess and discourage more production in order to avoid prices from collapsing and farmers from going out of business.
However, that long-standing situation has rapidly reversed amid the global commodities boom, driven by surging demand in fast-growing developing countries such as China.
The increasing use of farmland to grow crops for biofuels has added further pressure on what has become a tight market, driving food prices ever higher and pinching supplies for raw ingredients.
In hope of boosting supplies, farm ministers are preparing to take one of the few steps available to them next week and suspend a rule requiring 10 per cent of fields to be left fallow for a year.