Page last updated at 16:27 GMT, Friday, 18 July 2008 17:27 UK

EU's 'spare 1bn euros' for Africa

A farmer in Burkina faso
The EU hopes funds will alleviate food shortages in Africa

The European Commission has backed a plan to give 1bn euros (800m) of unspent EU farm subsidies in aid to farmers in Africa.

The cash could help farmers boost output, helping tackle food shortages and soaring prices.

The money has been allocated to the EU agriculture budget, but not spent.

Some countries have queried the move's legality. But if EU ministers and the European Parliament agree, it could take effect in early 2009.

European Commission President Jose Manuel Barroso said: "The impact of high food prices is particularly severe for the world's poorest populations."

Without European help, United Nations goals to halve world poverty might fail, and tensions between countries in Africa over resources might intensify, he said.

'Rapid instrument'

The EU's vast agriculture budget eats up more than 40% of the EU's annual expenditure, and is worth about 120bn euros.

But rising food prices mean the EU has saved money on export subsidies, leaving a surplus.

That money would be used to boost the supply of fertiliser and seeds for African farmers, helping increase production over the next two years, said commission spokesman Johannes Laitenberger.

"There's a fairly broad consensus on the need to act here, given the crisis which is taking place," he said.

"In the commission's opinion, this is the most efficient and most rapid instrument that could be used."

Golden opportunity

There will be some tricky negotiations, for example on how to decide what criteria countries need to meet in order to be eligible for the cash, and how much each country should be allocated, says the BBC's Europe reporter, Dominic Hughes.

The commission may have to consider factors such as how much food a country produces to feed itself, political stability and social vulnerability, the level of food price inflation and the reliance on food imports or food aid shipments.

EU foreign ministers in Brussels, file picture
The EU may welcome the chance to prove it can act, not just talk

Our correspondent says the payouts are a golden opportunity for the commission to be seen to be doing something useful with money that is often at the centre of allegations of waste, inefficiency and corruption.

The plan has been welcomed in theory, but some EU member states have reservations.

The UK, Sweden and the Netherlands are among some countries which say they like the idea, but argue that the scheme may not be legal under EC rules.

However, officials from the commission say it has been cleared by the EU's legal service and are confident it will work.

Ministers could still block the plan and the commission fully expects some member states to grumble about it, our correspondent says.

But the commission believes that in the end members states will reach the same conclusion - politically, this proposal just looks too good to turn down.

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