The flood of barley into European Union intervention stocks this season is not a major concern and there are no immediate plans to dispose of the grain, a senior EU official said on Tuesday.

"I think we will just sit on it and wait for better times. It is not unmanageable in any way," Lars Hoelgaard, Deputy Director General of DG Agriculture and Rural Development for the European Commission told Reuters in an interview.

Hoelgaard said on the sidelines of Agra Europe's Outlook for Agriculture 2010 conference that he expected intervention barley stocks would reach around four million to five million tonnes by the end of the current season.

He noted that cereal stocks in intervention stores had reached about 30 million tonnes and has been disposed of without too much difficulty.

"It is not so preoccupying (to have 4 to 5 million tonnes)," he said.

Hoelgaard said part of the use of intervention stocks were sales to support a social programme -- the most deprived person scheme.

Member states can request intervention grain under the programme and either use it directly for the social programme or sell the grain on either the domestic or export markets and use the funds for the scheme.

"It forms part of the plans which are adopted each year by the commission on the basis of the demand from the member states who participate in the programme," he said.

INTERVENTION STILL OPTION

Hoelgaard noted that unlimited intervention for barley was ending at the end of the current season but did not rule out the possibility that the Commission could decide, under certain conditions, to allow sales into intervention stores. "Intervention (for barley) hasn't disappeared but will now be based on a decision by the Commission if the market situation is so negative that we feel there is a need to buy intervention stocks," he said.

"On the one hand the safety net has been weakened but it certainly hasn't disappeared," he added.

Hoelgaard said he does not now expect it will be necessary for the Commission to intervene in feed grains such as barley and maize next season.

"The outlook for next year's harvest is pretty good but it is still pretty much in balance both within the EU and worldwide. It is premature to speculate whether some kind of support will be necessary or not," he said.

Hoelgaard said the Commission also currently had no plans to provide further licences for "out of quota" sugar after allowing in late January a further 500,000 tonnes to be exported during the 2009/10 marketing year.

"We underlined this was an exceptional thing in view of very high world market prices. We did not want to encourage the industry, the beet growers, the processors to plant more beet than was necessary," he said.

The move prompted protests from the other exporters including Australia, Brazil and Thailand.

Hoelgaard said talks with other exporters were "ongoing" adding the additional exports were allowed at a time where global prices has risen well above the cost of production in the EU, ensuring such sales did not requires subsidies.

He added the availability of the extra sugar in the EU reflected high yields rather than an expansion in area, something the Commission is keen to not encourage.

"If we were having a price spike, then we would have to be pretty sure that this is not just a price spike that will last a day or a month or a couple of months because it may have the effect of influencing farmers' decisions on how much they should grow in terms of beet beyond the quota," he said. 
Reuters; Balkans.com