Droughts bring global food crisis

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THE European food mountain has virtually disappeared. The main cause is the worst food crisis in 20 years, which has left humanity with only 53 days' supply of grain, well below what UN agencies estimate as the minimum safe level.

European land which farmers had been paid to set aside, in order to prevent surpluses, is now being put back into production. And the European Union, which has long subsidised food exports, is now preparing to tax them.

This astonishing upset, which has caught Euro-sceptics as well as Euro- enthusiasts unawares, is partly the result of reforms to the Common Agricultural Policy (CAP) in the summer of 1992 which forced farmers to set aside land from production.

But the main cause is the world food crisis, which has slashed stocks of grain to their lowest-ever level and set prices soaring to record heights.

This year's harvest - affected by heat and drought across the globe - has produced less food per head of population than any since the world food crisis in the mid-1970s.

This is the third year in succession in which world food production has fallen short of consumption.

Britain's Intervention Board, which manages the surpluses, said last week: "The grain mountains are almost non-existent. We have reached the stage where virtually all our stores are empty. There is no skimmed milk, no butter and virtually no beef and grain."

Last year Britain had more than 1.1 million tons of grain in store, the board said. Now it had only 150 tons of barley - too small an amount for anyone to want to buy and transport.

Thirty-six vast aircraft hangars scattered across the country, which have been used to store Britain's contribution to the grain mountain, were now all empty. Europe's grain mountain had fallen from 33 million tons to 5.5 million tons in two years, the board added, and stocks of skimmed milk had similarly fallen to one-sixth of last year's level.

The only significant surplus remaining was the wine lake, at 120 million litres.

World food prices have soared above the politically inflated European ones, long a primary target of British ministers and Euro-sceptics alike. For the first time in 20 years, the EU has stopped subsidising exports; instead, the European Commission last month made legislative provision to tax them to make them more expensive - the first levies may be imposed as early as the coming weekend.

The proportion of land that farmers have to set aside is being cut to 10 per cent, in an attempt to boost production. Two years ago it was 15 per cent.

Last month, the Agriculture minister, Douglas Hogg, was still attacking the CAP as "highly subsidised" and "largely insulated from the influence of world markets". Now a senior Agriculture Ministry official admits: "Britain has quietly dropped its drive for immediate reform."

Instead, ministers are merely saying in Brussels that reform will be necessary if the EU is expanded to take in Eastern European countries.

Inside Story, page 17