Subsidies paid to EU farmers to leave land fallow have been suspended this afternoon (26 September), following concerns about potential food shortages and high prices.

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The EU Council of Minister has abandoned “set aside” payments for the rest of this year and for spring 2008 sowings.


A rule ordering 10% of land to be left fallow has been temporarily scrapped in response to the tightening of the cereals market and a supply shortage caused by recent poor weather.


EU Agriculture Commissioner Mariann Fischer Boel said she may next month propose that the set-aside policy, which in the past has successfully combated grain over-production, should be abolished altogether.


The latest move is estimated to put an extra 10m tonnes of cereals on next year’s yield, easing commodity cost pressure on food processors throughout the EU.

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With poor weather slashing EU grain yields and US producers switching production for bio-ethanol markets, grain prices have soared worldwide.