Europe urged to combat rising food prices

  • 12/05/2008

  • Age (Australia)

UK Chancellor of the Exchequer Alistair Darling will call on European Union finance ministers to combat rising food prices by removing import levies and scrapping rules that keep food prices in the 27-nation bloc artificially high. Darling said the action is needed to curb headline inflation rates and to help the poorest households deal with a 7% increase in food prices that took place in the year through March, according to a letter he will send his EU counterparts tomorrow. Darling is due to meet with ministers in Brussels this week. ''The EU has a clear responsibility to play a full role in the international community's collective efforts to address the consequences of spiraling food prices by tackling the causes, but it also has a responsibility to its own citizens to ensure that its own policies do not unnecessarily inflate the cost of food,'' according to the letter, which was issued by Darling's office in London. Darling's words echo remarks by Foreign Secretary David Miliband, who last week said the world is heading toward a scramble for resources that may increase political tensions. The call for action on food prices is also the latest argument deployed by the UK in its call for the EU to scrap the Common Agricultural Policy. Specific steps called for by Darling include the ''phasing out of all elements'' of the EU's farm policy that he said ''are designed to keep EU agricultural prices above world market levels'' and which cost consumers 43 billion euros ($US66 billion) in 2006. He also called on the EU to end direct payments to farmers, worth 34 billion euros or just over a third of the EU's entire budget that same year. The policy is ''unacceptable,'' Darling's letter said. ''The Commission should give urgent consideration to extending the suspension of import tariffs on grains and to reducing or suspending the import tariffs that apply to other agricultural commodities.'' Bloomberg