EU to offer €1 billion from unspent farm funds to poor countries

Mrs Fischer Boel argued that while the EU had taken "immediate action" to support higher agriculture outputs in Europe, it must now concentrate on helping the poorest countries which are facing deadly consequences from the current food price hikes across the globe.

"I think there are two sides of the coin: there are those who are food exporters and can take advantage of food exports to improve the economy on their own country. But those who are net food importers are in serious trouble," she told journalists.

"Within the European Union, we will come forward ... with a package to make possible for the net food importing developing countries to get money for seeds and for fertilisers to improve their own production facilities," the commissioner added.

According to Financial Times, the draft proposal suggests setting up a fund of €750 million in 2008 and €250 million next year taken from money allocated to buy up unsold EU crops which are not needed because of rising food demand.

The biggest part of the extra cash should be spent on buying fertilisers and seeds or other measures to increase production, while up to 15 percent could be spent on food aid.

It is expected that the proposal will spark a lively debate among member states, with Germany usually objecting to the use of unspent money from European coffers that would otherwise return to national budgets.

Paris backs regional trade clubs

Meanwhile, France is maintaining its critical tone against ideas from Brussels that concessions on farm policy be made in favour of developing states.

Speaking at the food security conference on Wednesday, the French agriculture minister, Michel Barnier, said "The sole rule of free trade and markets are not enough to solve the issue of hunger or supply."

"The response to food security cannot be simple de-regulation of trade, nor is it enough to rely on protectionism. The international market remains necessary, but it needs to be properly organised and of course our choices in terms of production are the sovereign decisions of each country," he added later at a press briefing.

As an alternative solution to the current crisis, Mr Barnier backed the idea of "regional agricultural markets", mainly in Africa, which would help pool farm resources by creating collective grain storage or jointly managing rivers for irrigation.

"We should strive to come up with a targeted aid package for a specific region," said the French minister.