Biofuel crops farming subsidies to see cuts

The European Commission (EC) was planning to cut the subsidies for growing crops for biofuel after the radical increase in food prices this summer and the shifting of gradually increasing volumes of sunflower seeds, corn and wheat towards the production of biodiesel and bioethanol, Sega daily reported on October 29.

The size of land for which farmers may receive a subsidy of 45 euro for a hectare (ha) in exchange for planting the so-called "energy crops" would be reduced after the scheme proved too popular, the EC said on October 17. The programme was introduced in 2004 as part of the reformed Common Agricultural Policy, in order to stimulate the EU biofuels sector. At the time, just 0.31 million ha were devoted to biofuel crops and the EC hoped to raise this to two million ha in 2007. But with applications already reaching 2.84 million ha this year, the EU's 90 million euro budget was unable to cope.

EU agriculture commissioner Mariann Fischer Boel questioned the necessity of continuing the subsidy. The payment had been very useful but it was hardly necessary any longer. The EU now had a binding target for biofuels and a blossoming marketplace, Fischer Boel said, as quoted by Sega. She was referring to a binding goal set by the EU to increase biofuel use in transport from its current level of under two per cent to 10 per cent by 2020.