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EU May Trim Biofuel Crop Cash After Extra Land Sown |
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| BELGIUM: July 9, 2007 | ||
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BRUSSELS - European Union agricultural regulators are likely to reduce subsidies paid to farmers to help them grow more biofuel feedstock crops after planting rose more than expected, officials said on Monday.
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One particular subsidy payment, called the energy crop premium, was introduced in 2004 after the EU's major farm policy reform the previous year. From 2007, the bloc's newest joiners, including Bulgaria and Romania, get the same payments. A flat-rate subsidy of 45 euros (US$63.49) per hectare, it aims to encourage farmers to grow raw materials for biofuels. Crops targeted include sugar beet, cereals and vegetable oil plants such as rapeseed. This year, the EU raised the maximum area that can benefit from the energy crop subsidy to 2 million hectares from 1.5 million previously. EU governments may also fund farmers to grow such crops, with a subsidy of up to half the costs incurred. But it seems like that increase in area was not enough. "We have a premium of 45 euros per hectare, payable on two million hectares. If it (total area) is more, the regulations a lay down that we reduce it (premium) by a certain coefficient," one European Commission official said. "For 2007, the area looks close to three million hectares, therefore there will be a reduction, maybe down to 30 euros."
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REUTERS NEWS SERVICE
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