Bloomberg News

EU Countries May Advance Farm Payments on Financial Crisis

July 25, 2012

European Union countries may advance farmer direct payments earlier than usual to address “liquidity problems” stemming from the financial crisis and unfavorable weather conditions, the European Commission said.

EU member countries may advance 50 percent of direct payments under the Common Agricultural Policy and 80 percent of beef and veal payments beginning Oct. 16, before the usual date of Dec. 1, the commission, the EU’s executive arm, said today in an e-mailed statement. The proposal was backed by the EU’s Direct Payments Management Committee today, the commission said.

Farmers face “exceptional conditions caused by the ongoing financial crisis and unfavorable climatic conditions,” the commission said.

Livestock feed prices have surged globally as the benchmark price of corn climbed 56 percent since mid-June on the Chicago Board of Trade, with the most-active contract touching a record $8 a bushel on July 23. The worst U.S. drought in decades has damaged crops, with the government rating corn and soybean conditions as the worst since 1988.

EU grain and oilseed farmers are contending with dry weather in southern and eastern regions, while too much rain has delayed crops in northern and western countries, the bloc’s crop-forecasting unit said July 23. The EU is the world’s biggest grower of wheat and rapeseed and ranks third for beef production, after the U.S. and Brazil.

Ten countries -- Portugal, Spain, Italy, Greece, Lithuania, Hungary, France, Latvia, Romania and Ireland -- have requested advance payments for farmers, the commission said.

Greece, Spain

Greek Prime Minister Antonis Samaras will meet with the commission, European Central Bank and International Monetary Fund representatives July 27 amid concern the country will fail to abide by the commitments needed to obtain continued financial aid. Yields on Spain’s two-year notes rose to as much as 7.15 percent earlier today, climbing above 7 percent for the first time since the single currency came into being.

In a separate decision, the direct payments committee said farmers and milk producers in northern Italy, who were affected by an earthquake in May, can receive advances of 50 percent from Aug. 1, according to the statement.

To contact the reporter on this story: Whitney McFerron in London at wmcferron1@bloomberg.net

To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net


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