European Union agriculture ministers started a two-day meeting in Brussels on Monday to discuss plans to go on subsidising tobacco production by about £700m a year until 2003.

The meeting is studying a plan submitted by the European Commission which includes incentives for producers to switch to more lucrative, higher-quality tobacco and makes it easier for farmers to switch to other kinds of work if they wish.

Britain, which holds the EU presidency, has reservations about continuing the subsidies because of the health risks posed by tobacco but it is signalling that it will accept the proposals.

Eight countries in the union grow tobacco with EU funding. Greece and Italy benefit the most from the generous subsidies to tobacco producers.

The EU's Mediterranean members see their tobacco production as socially and economically important in areas where there is little alternative employment.

However, northern countries see a paradox in paying money to subsidise the crop while promoting health schemes.

The discussions highlight an apparent contradiction in EU policies on tobacco. Before Christmas, European health ministers agreed to ban tobacco advertising and sponsorship.

The European Commission argues the subsidy payments for tobacco growers are justified because over 200,000 jobs depend on them.

It says there is no evidence to suggest that consumers would smoke less if the subsidies are withdrawn.

The BBC's Europe political correspondent says it is almost certain the European Commission's susbidy proposals will eventually be approved.
 

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