EU agriculture ministers agree to a deal that would uncouple subsidies from the production of olive oil, cotton and tobacco sectors.
After 20 hours of negotiation, European Union agriculture ministers on Thursday agreed to reform the EU’s olive oil, cotton and tobacco sectors. According to reports, the deal will mean that some subsidies are no longer linked to production, theoretically reducing incentives for overproduction. Concerns over the social consequences of funding tobacco production and harming cotton producers from developing countries appear to have marginally outweighed the economic interests of France, Greece, Italy, Portugal and Spain. Many developing countries are dependent on cotton and tobacco, and olive oil is a staple of the Mediterranean economy as well as the diet. The move mirrors one made last year when agriculture ministers agreed to break the link between production and subsidies in the EU’s Common Agricultural Policy, but olive oil, cotton and tobacco were excluded from that agreement. Reforms of these sectors will come into effect in 2006, although major exceptions apply. ( EUobserver.com)