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At G-8, E.U. pledges €1 billion for agriculture in Africa and beyond

High food prices are allowing Europe to reallocate money usually budgeted for European farm subsidies.

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Bounty: The European Union usually pays farmers such as this one in England for surplus crops. This year, farmers don't need the safety net.

Tim Graham/Getty Images/FILE

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There may be a bright side to the food crisis, at least for farmers in the developing world. The European Commission has announced that it will divert the funds it normally sets aside to buy up surpluses from European farmers to agriculture in Africa and other struggling regions.

"Our idea is to use unspent Community funds in a creative and positive way," European Commission president José Manuel Barroso said Monday at a meeting with African leaders at the G-8 summit. "I am announcing today our intention to establish a €1 billion ($1.57 billion) facility to support agriculture in developing countries. This will aim to generate a strong and rapid agricultural supply response."

In the past, that €1 billion would have gone to paying for the so-called "grain mountains" and "milk lakes" that resulted when EU farmers produced more than they could sell. The European Union's Common Agricultural Policy (CAP), which consumes 40 percent of the EU's total budget, provides subsidies for farmers who produce surpluses of certain crops.

But with spiraling food prices (7.1 percent higher in EU member states this April than the previous year), European agriculture no longer needs the safety net. And with many parts of the world suffering food shortages, the EU, said agriculture commissioner Mariann Fischer Boel at a conference on the crisis last week, "needs to act now to boost harvests [in developing countries] over the next seasons."

According to Ms. Fischer Boel, whose office expects to announce details of the plan next week, the money will be used to help impoverished countries feed themselves. "If European farmers effectively give a helping hand to developing countries' farmers to get access to seed and fertilizer, this would be a clear sign of international solidarity and would – in the interest of us all – increase production and help to stabilize the markets."

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