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French wheat growers angry over China grain accord

PARIS: Wheat growers criticised the French government on Thursday for failing to offer specific volumes to China in a three-year grain supply accord.

They also turned their fire on the European Union, saying China's need for food demonstrated the folly of leaving farmland out of production in Europe.

"It is incomprehensible that France should not have made a commitment on volume," the AGPB French wheat association said, commenting on the deal signed during a visit to France by Chinese Premier Li Peng on Wednesday.

France and China exchanged letters of intent for Paris to supply an unspecified amount of grain to China over three years.

The French foreign ministry said volumes and prices would be set annually, but grain industry sources said actual sales would depend on market conditions and could not easily be fixed ahead.

The AGPB said in a statement that China needed France and the rest of Europe to help feed its 1.2 billion population. "It does not want to depend solely on American supplies," it said.

Grain industry sources said China was unlikely to have accepted specific volume pledges in the grain deal as these would have narrowed its own room for manoeuvre on world markets.

The world's largest importer is trying hard to balance the needs to diversify its supply sources and to maintain maximum flexibility in a market that is tighter than for many years.

The AGPB said the Franco-Chinese deal could become reality only if Europe produced more grain. It urged the EU to scrap its set-aside policy starting with the next crop.

The policy was drawn up to deal with past surpluses and requires grain farmers to leave 10 percent of their land idle. But stocks are now at their lowest for around a decade, leaving less for export.

EU officials argue that abolishing the scheme now would merely create new unwanted surpluses in the future.-Reuter