Rapid response to soaring food prices

The Parliament is currently in discussions before a vote on the regulation submitted by the Commission. It is hoped that this regulation might facilitate a quick response to soaring prices in developing countries.


Background

Soaring food prices have had alarming consequences for the world’s population and is now threatening food security, ironically, they are helping local farmers to maintain the sustainability of their crops.

The Commission’s initiative

According to some Commission services, the estimated budget needed to compensate for the increase in food prices is €18bn. The Commission is keen to resolve the issue as soon as possible by providing an initial 10% (€1.8bn) of the budget to developing countries. This short-term help would encourage farmers to keep on producing and offset the negative effects with the aim of increasing agricultural production and food security, reducing malnutrition rates and price inflation.

A controversial subject

In July 2008, the Commission adopted the proposal for a regulation to establish a facility for rapid response to soaring food prices in developing countries. The envelope is of €1 billion while the other €0.8 billion would be provided by existing means such as the Humanitarian instrument and the Instrument for Stability which are “immediate-crisis-answer tools” but also by the Development Cooperation instrument and the European Development Fund which are long-term cooperation tools.

Nevertheless, the vote on this proposal for a regulation will affect the budget of the Commission, which is proving to be an issue for the Committee on Budget. At the meeting on 10/11 September 2008, the draftsman Reimer Böge, insisted that the Multi-Annual Financial Framework should not be revised unless the budget were to be re-allocated from one category to another. The Development Committee also met on 10 September 2008 to exchange views on the draft report submitted in August and will vote on the issue on 6-7 October 2008.

Next month, the European Parliament will vote on the first reading of this proposal of the regulation.

For more information
- Agriculture Commissioner speaks to the AGRI Committee on CAP
- Joint Committee Meeting European Parliament - National Parliaments on the EU and Development Cooperation

Last modified on October 1 2008.