EU drops tariffs on cereals to tackle rising food prices
JOCHEN LUYPAERT
28.11.2007 @ 08:15 CET
The European Union has agreed to temporarily suspend import tariffs on cereals in an effort to counter rising food prices.
On Tuesday (27 November), EU agriculture ministers unanimously supported the European Commission's proposal to remove tariffs put in place on all cereal imports – except oats - from December until 30 June 2008.
Global market prices for grain and other cereals are on the increase. (Photo: EUobserver.com)
The decision comes in response to dwindling cereals supplies, caused by a bad harvest year and tight conditions on the world market, which are increasingly pushing up food prices in Europe.
On the world market, prices have been on the rise in the past year, because demand is growing from emerging economies like China, and because farmland is increasingly being used to grow crops for biofuels.
Prices of grain – a key ingredient of many food products – have risen in the past year from €179 per tonne to €300, causing an overall increase in the cost of nutrition.
While tariffs on cereals are already on the lower end – less than 10% of prices – the commission believes that the complete removal of the tariffs will come as a relief to the food market.
The surging prices have turned the tables around for the EU. While the union was until July 2007 a net exporter of food products facing overproduction, it is now a net importer suffering from insufficient domestic production.
Soaring food prices are considered to be particularly worrisome for the less affluent sections of the European population, which are seeing more of their incomes being eaten away.
In September, pasta makers in Italy protested against the soaring prices of their basic ingredient.
Besides the tariff removal, the EU has also abolished the requirement for farmers to leave a part of their land fallow each year, making more land available for growing crops.