The European Commission has asked EU ministers to approve the extension for an additional three years of aid payments to inspection agencies charged with overseeing the payments of olive oil producers. The continuation of the existing handouts is expected to cost the EU €43.5m, from 2002 until 2005, when it is anticipated that a new system will be introduced.

These inspection agencies are charged with “overseeing compliance with regulatory obligations in the Member States producing olive oil.” Without agreement from ministers, they would run out of funding; the olive oil sector has been at the centre of a series of allegations regarding fraud in EU subsidy applications.

By Keith Nuthall, correspondent