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EU farm subsidies 'more important than ever'

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EU farm subsidies 'more important than ever'

Dacian Ciolos - Photo EC

(BRUSSELS) - EU agriculture commissioner Dacian Ciolos argued Monday that the economic crisis justified the need to keep a strong aid policy for Europe's farmers, which developing countries slam as unfair.

The economic and financial crises, which have hit consumption and led to price volatility show that the bloc's controversial Common Agricultural Policy (CAP) -- under which the farm handouts are made -- "has a more important role than ever," Ciolos told reporters just before opening a public debate on the policy's future.

The current system for the CAP, which swallows up some 40 percent of the EU's total annual budget, is due to expire in 2013. The 27 EU nations are divided over what exactly will replace it.

France, the system's main beneficiary, leads the calls to maintain a strong system of farming subsidies, followed by Spain and other heavily agricultural economies.

French President Nicolas Sarkozy said last month he was ready to risk provoking a "crisis" in European relations in his efforts to defend EU farm subsidies that French farmers have enjoyed for over 40 years.

On the other hand, Britain, the Netherlands and Sweden want to see a continuation of the gradual reductions in the subsidies already introduced, leaving farmers, eventually, to deal with the rules of the market.

Romanian Ciolos said a position somewhere in the middle should be found, and opened a period of public consultation to add to the search for a revised system.

"A lack of intervention could cost much more in the medium-term," he warned, while admitting that the subsidies system "needs to be fairer."

His vision is for a reform of the CAP which takes into account the need to intervene during crises,and if possible avert them, "while allowing the market to play its role."

Questioned on the criticism from developing nations that the farm subsidies penalise their own producers, the EU commissioner stressed that Europe had done much to minimise the effects, for instance "reducing greatly subsidies on exports."

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