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June 7, 2011

EU: Agriculture council rejects EUR150m rescue deal for farmers

The European Commissioner for Agriculture and Rural Development has said he will provide the EU's Agriculture Council with a revised offer after it rejected an EUR150m (US$220m) compensation package for farmers hit by the E. coli crisis.

The European Commissioner for Agriculture and Rural Development has said he will provide the EU’s Agriculture Council with a revised offer after it rejected an EUR150m (US$220m) compensation package for farmers hit by the E. coli crisis.

Following a meeting with the council today (7 June), Dacian Ciolos told journalists that he would come back with an “improved proposal” for ministers, most likely tomorrow.

The original proposal would have compensated farmers at 30% of the average selling price between 2007-2010.

The announcement came as The European Commission said that fresh vegetable sales were down by two-thirds following accusations by Germany that Spanish cucumbers were responsible for an E. coli outbreak that has killed some 22 people.

Ciolos said the Commission was in an “awkward situation” as it needs to take into account both the losses suffered by farmers as well as budget constraints. He said he does not think that the Commission will be able to go up to 100% for all products and all producers.

The Agriculture Commissioner also highlighted the challenge the Commission faces in compensation. As the EU needs to work as a single market, it might end up over-compensating some farmers, saying that what is 100% compensation for one farmer, might be 120% or 130% for others.

Ciolos also said there would need to be further investigation into which have been the worst-hit products. While cucumbers, tomatoes and lettuce have been the worst hit produce types, other vegetables, such as courgettes have also been impacted.

The Agriculture Council and the Commissioner avoided queries around whether Germany should be forced to shoulder the financial burden alone, given that its allegations triggered the drop in sales.

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