The European Commission is set to recommend a shake-up of Europe's farm sector to crank up production in the face of soaring demand.
With food prices rocketing worldwide on tight supplies, the EU's executive arm wants to encourage farmers to produce more after years of trying to rein in overproduction.
Even though prices of farm products have eased off recent peaks, they remain at historically high levels amid rising demand in China and India with wheat up 84% over one year, maize 21% and butter 21%.
According to drafts, the commission's proposals focus on phasing out milk quotas and scrapping rules on keeping land fallow, which it hopes would bring four to five million hectares of idle fields into production.
The commission also wants to shift more funds used for subsidies to development of rural areas by reducing handouts for the biggest farms although it has had to water down that proposal under pressure from some countries.
The commission wants the new wave of reforms to build on an earlier shake-up in 2003. It came just before the EU took in ten mostly former communist countries, in May 2004, whose farming sectors have had to modernise quickly.
While 90% of farm subsidies are currently decoupled from production, the commission wants to take that principle even further, making it applicable to an even broader range of crops and products.
The proposals will next go to member states and the European Parliament to consider in the second half of 2008, when France, the biggest national recipient of EU farm subsidies, holds the bloc's rotating presidency.
