- Associated Press - Tuesday, June 7, 2011

BRUSSELS (AP) - Big fruit and vegetable producers Spain, Italy and France angrily demanded compensation for farmers who have been blindsided by huge losses in the E. coli outbreak, forcing the EU farm chief to increase his offer of aid.

Farm Commissioner Dacian Ciolos at first offered euro150 million ($219 million) to the struggling farmers, who have tons of unwanted cucumbers and tomatoes rotting in fields and warehouses as Europeans shun vegetables, fearing they are contaminated with a deadly strain of the E. coli bacteria.

But EU agricultural ministers scoffed at his proposal, saying their farmers are seeing losses up to euro417 million ($611 million) a week so far. Farmers are livid that prices for their crops have collapsed after being erroneously blamed by German health officials for an outbreak that has killed 24 people and infected over 2,400. The cause of the contamination crisis is still unclear,

Ciolos then promised to come up with a higher offer within days to compensate farmers through June, but did not name a specific figure.

“The market has dropped two-thirds and fruit and vegetables cannot be sold in Europe now. This is a situation that has to be resolved now,” said Sandor Fazekas, the Hungarian farm minister who chaired the emergency meeting in Luxembourg.

“We have to reassure farmers that we are not leaving them alone,” Fazekas added. “These people ended up in this situation through no fault of their own.”

Spain and France, Europe’s traditional vegetable producers, emphatically insisted on more compensation.

“No, Spain does not see it as sufficient,” Spanish Agriculture Minister Rosa Aguilar said of Ciolos‘ first offer, a stance backed by French Farm Minister Bruno Le Maire.

Aguilar said the 27-nation EU should give affected farmers between 90 percent and 100 percent of the market price for their produce, a suggestion that Ciolos dismissed as unreasonable.

“I am prepared to revise this upward, but I don’t think the budget available at the moment will mean we can go up to 100 percent for all products and all producers,” he said. His first proposal was closer to 30 percent compensation.

The weekly losses have been staggering. Spanish farmers say they are losing euro200 million ($293 million) a week, while Italians cite losses of euro100 million ($146 million). Farmers in the Netherlands are losing euro50 million ($73 million) while those in Germany and France were each out euro30 million ($44 million).

EU farmers are one of the bloc’s most potent political forces, both in their home nations and in Brussels, and about 35 percent of the entire EU budget already flows to them in subsidies and compensation payments. Since this was a farm meeting, there was no discussion of compensation for victims.

The European farmers union COPA-COGECA painted a bleak picture by comparing vegetable prices this year to an average of the past five years. In a letter to EU leaders, the group said cucumber prices have fallen to 5 (euro) cents each from 21 cents, tomato prices have sunk from 60 (euro) cents to 13 cents a kilogram (2.2 pounds), and lettuce prices have plummeted from 70 (euro) cents to 5 cents.

The federation said vegetable farmers were seeing “unprecedented economic losses” and the crisis was being magnified because it hit just as many vegetables and fruits were ripe and ready for market.

EU health chief John Dalli, meanwhile, warned Germany against any more premature _ and inaccurate _ conclusions about the source of the contaminated food, telling the EU parliament in Strasbourg that information from health officials must be scientifically sound and foolproof before it becomes public.

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