Member states query 'Barroso's billion' for third world farmers
The European Commission on Friday proposed to deliver €1 billion in emergency funding over the next two years to the developing world to help them grapple with the global food crisis.
A number of member states however are critical of the plan, saying that while something must be done to deal with the crisis, "Barroso's billion" - as one diplomat called emergency fund - is not the way to go about it.
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The commission proposed the establishment of a special "facility for rapid response to soaring food prices in developing countries", operating throughout the rest of 2008 and 2009.
The new money would come on top of existing development funds, coming from unused money left over from the European Union's agricultural budget.
The aim is not to provide money so that poor people can afford to buy what they need to eat, but instead to give credit and other monies to farmers to help them produce more food and in so doing, bring prices down.
Countries most in need would be able to access the fund - to be administered via international and regional organisations, including the UN Food and Agriculture Organisation, the World Bank and Unicef - which would allow for the purchase of farming inputs such as fertilisers and seeds, although this could be done via credit mechanisms, rather than grants, as well as "safety net measures" for boost productive farming capacity.
European Commission President Jose Manuel Barroso said the ongoing food crisis was putting "at risk our progress towards the Millennium Development Goals and exacerbate tensions in poor countries, namely in Africa."
"[The €1 billion] is an act of solidarity with the world's poorest but also a responsible measure to promote stability. It is aimed at increasing agricultural production in developing countries to combat the effects of soaring food prices. Such an increase in supply is necessary to fight rising food prices world-wide."
High agricultural prices have resulted in extra cash in the 2008 EU budget and the commission believes this provides a "window of opportunity" to provide a temporary facility to help stimulate farming in developing countries.
Development groups cautiously welcomed the new fund. "Agriculture in the developing world has long suffered from a lack of investment, so this is a welcome sign that the commission has recognised the importance of putting money in this area," said Alexander Woollcombe, a spokesperson for Oxfam.
"However, this should not distract attention from the unfair trade and agriculture policies that are what caused the situation in the first place," he added.
The idea must first be approved by both the parliament and member states.
Some eight member states have said the scheme may not be legal - Austria, Britain, the Czech Republic, Denmark, Finland, Malta, the Netherlands and Sweden - according to diplomats.
One diplomat, speaking to the EUobserver, called the new fund "Barroso's billion", saying: "Many countries in the council have a lot of sympathy for the thought behind it, but worry whether it is in the EU rulebook financially."
The move was first announced by EU agriculture commissioner Mariann Fischer Boel at a Brussels international conference on the food crisis on 3 July. The commission formally announced the proposals on Friday.