The Commission now estimates production of common wheat, or soft wheat, this season at 114.6 million tonnes, down from 116.1 million predicted a month ago and nine per cent below last year’s crop.

It is also the lowest volume since 2012/13, bringing the Commission into line with other recent forecasts of the EU’s main cereal crop.

The EU harvest has been dented in particular by the smallest crop in France in 40 years, as well as a sharp fall in German production as the bloc’s two biggest wheat growers endured repeated heavy rain in the past year.

In monthly supply and demand data, the Commission increased its projection of EU soft wheat imports in 2024/25 by one million tonnes to seven million but left unchanged its soft wheat export forecast for this season at 26 million tonnes.

It lowered its forecast for 2024/25 usable production of maize in the EU to 60.1 million tonnes from 61.6 million in late August, now four per cent below last season’s level.

Maize crops, harvesting of which is under way, have been hurt by summer drought and heatwaves in the east of the bloc.

Estimated EU barley production in 2024/25 was also revised down, to 50.4 million tonnes from 51.3 million a month ago, though that was six per cent above last year’s drought-hit crop.

In oilseeds, the Commission lowered its estimate of the bloc’s rapeseed output this season to 17.2 million tonnes from 18.0 million, nearly 13 per cent below last year’s level.

For sunflower seed, which has also suffered from drought in eastern Europe, the Commission cut its production forecast to 9.5 million tonnes from 9.9 million, three per cent below the previous crop.

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“The European Commission has approved, under the EU Merger Regulation, the proposed acquisition of Viterra Limited by Bunge Global S.A. The approval is conditional upon full compliance with the commitments offered by the parties,” it said.

The companies announced the deal to create one of the world’s largest agriculture trading firms a year ago, in order to compete more strongly with market leaders Archer-Daniels-Midland and Cargill.

—Reporting for Reuters by Sudip Kar-Gupta

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The companies announced the deal to create one of the world’s largest agriculture trading firms a year ago to better compete with market leaders Archer-Daniels-Midland and Cargill.

Bunge and Viterra earlier this month offered to sell Viterra’s crush and refining plants for oilseeds in Hungary and Poland to allay EU competition concerns.

They will now tweak these offered remedies in return for the European Commission’s approval and following feedback from market participants, the person said.

The Commission, which is scheduled to decide on the deal by Aug. 1, and Bunge declined to comment.

The deal, which has been given a green light in Brazil, faces regulatory headwinds and farm groups’ concerns in Canada.

Bloomberg was the first to report about the imminent EU approval.

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The companies, which announced the deal a year ago to better compete with global giants Archer-Daniels-Midland and Cargill, submitted concessions to the EU competition enforcer last week.

They offered to divest assets in two EU countries, other sources told Reuters last week.

Viterra has 13 oilseed crushing plants among its more than 30 processing and refining facilities in 11 countries, according to its website.

The European Commission, which is scheduled to decide on the deal by Aug. 1, has sought feedback from farmers’ groups, clients and rivals before deciding whether to accept Bunge’s offer.

“We are confident that the commitments we have offered address the areas of concern expressed by the Commission, which are limited to specific markets,” Bunge said.

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The companies put in their offer to the European Commission on Thursday, according to an update on the EU executive’s website which did not provide details.

The companies announced their merger a year ago in a challenge to global giants Archer-Daniels-Midland and Cargill.

The European Commission extended its deadline for a decision to Aug. 1 from July 18.

A spokesperson for Bunge said the company was in constructive discussions with the European Commission, and confirmed it offered concessions without specifying what they were.

“We are confident that the commitments we have offered address the areas of concern expressed by the Commission, which are limited to specific markets,” the spokesperson said.

The European Commission is expected to seek feedback from rivals and customers before deciding whether to accept the concessions or demand more. It can open a four-month investigation if it has serious concerns.

The deal has triggered concerns from the Canadian competition watchdog and farm groups. It requires regulatory clearance in North America, South America and China.

—Reporting for Reuters by Foo Yun Chee

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The companies announced their merger a year ago to rival global giants Archer-Daniels-Midland and Cargill.

The Commission, which acts as the EU competition enforcer, can either clear the deal with or without remedies after its preliminary review or it can open a four-month investigation if it has serious concerns.

Bunge Chief Executive Greg Heckman has said the company may be able to avoid having to sell assets to win regulatory approval thanks to healthy competition in commodities market in Canada, the United States, Brazil, Argentina, China and parts of Europe.

The Canadian competition watchdog, however, has cited major concerns while farm groups voiced similar worries.

The deal also needs the regulatory green light in North America, South America and China.

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The proposals reduce some of the environmental rules linked to the disbursement of tens of billions of euros in farming subsidies.

To receive subsidies, farmers would no longer have to leave four per cent of their land fallow to support biodiversity.

Farmers could carry out crop diversification, rather than crop rotation, and countries will be able to introduce exemptions from the rules if they face difficulties applying them, and in cases of extreme weather.

Small farms below 10 hectares (about 25 acres) will also be exempt from control checks or penalties for not complying.

The farming subsidy tweaks are one of many policy changes the EU has made, or is considering, in response to months of farmers’ protests over issues including cheap imports and EU regulations.

With less than two months until European Parliament elections, many EU lawmakers are anxious to address farmers’ concerns to attempt to ward off gains by far-right parties, for whom farmers represent a growing constituency.

However, Green lawmakers and campaigners have criticized the weakening of green rules as hasty, and not in the interests of Europe’s farmers, who are facing increased stresses from climate change-fueled extreme weather.

The European Commission has said it is not weakening its environmental ambitions, but making the rules simpler.

“Some elements of the Green Deal are difficult to fulfil for farmers. Our answer is some simplification of our requirements,” EU farming commissioner Janusz Wojciechowski told Reuters earlier this week.

Organic farming group IFOAM said the proposal did not address farmers’ concerns.

“The proposal fails to address the real issues of low prices linked to power imbalances and will ultimately undermine the EU’s environmental ambitions,” IFOAM President Jan Plagge said.

The proposal needs final approval from EU countries, which is expected in May.

—Additional reporting  for Reuters by Casey Hall in Shanghai

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EU decision-makers have wrangled for weeks on limits to tariff-free access for Ukrainian produce as farmers protested about cheap imports, with some in Poland blocking the border with Ukraine and spilling Ukrainian grain across rail tracks.

EU lawmakers and Belgium, which holds the six-month rotating EU presidency, said they had reached an deal on the curbs. This will still require approval from other EU members and the European Parliament.

The European Commission proposed in January extending tariff-free access until June 2025, but with a so-called emergency brake for poultry, eggs and sugar to apply tariffs if imports exceeded the average of 2022 and 2023 levels.

Since then, oats, maize, groats and honey have been added, with the average also to be calculated including the second half of 2021. In that year, which was before Russia invaded Ukraine, imports were far lower because tariffs applied.

EU lawmakers and Belgium agreed on that formula on Monday, an EU diplomat said.

—Reporting for Reuters by Philip Blenkinsop

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From Poland to Portugal, farmers have won remarkable concessions in response to waves of street action, reshaping the European Union’s green politics months ahead of European Parliament elections.

Environmental activists and analysts say the policy backsliding illustrates the considerable political influence of farmers as mainstream parties seek to impede the far right and nationalist parties’ hunt for votes in rural areas.

Farmers again blockaded streets surrounding the European Union headquarters in Brussels last week, spraying manure to protest low incomes, cheap food imports and burdensome red tape. As they did so, the bloc’s farming ministers backed a new set of changes to weaken green rules linked to the disbursement of tens of billions of euros in farming subsidies.

When the last European elections were held in 2019, the Greens made strong gains and climate activist Greta Thunberg was voted Time Magazine’s Person of the Year.

“The elections in 2024 will be elections in the year of angry farmers,” said Franc Bogovic, a Slovenian lawmaker in the European Parliament and himself a farmer.

The scramble to placate farmers has impacted key pillars of EU policy, pressuring the bloc over its Green Deal and free trade accords.

EU environment commissioner Virginijus Sinkevicius warned of a “disastrous” blow to the bloc’s credibility last week, when EU countries declined to approve a landmark law to safeguard nature, leaving it unclear if the policy will be passed.

Other green measures are hanging in the balance ahead of the election. EU countries asked Brussels last week to scale back and possibly delay a new anti-deforestation policy, which they said could harm local farmers.

In France, senators in March voted against ratification of an EU-Canada free trade deal, targeting a symbol of the EU’s willingness to open up markets and boost competition.

And while the EU has extended tariff-free access for Ukrainian food producers, it agreed last month to impose duties if imports exceed a certain level, in response to farmers’ protests.

Some farming groups acknowledge the response by policymakers to the protests is likely linked to June’s elections – but say the weakening of green rules is not what they want.

“Our demands (for fair prices) have not actually been met,” said Dutch farmer Leonardo van den Berg, a representative of farming association La Via Campesina.

Rural discontent

Farmers account for 4.2 per cent of the EU’s workforce and generate just 1.4 per cent of the bloc’s gross domestic product. However, their protests resonate in the countryside where discontent towards distant policymakers and questions of cultural identity run deep.

A report commissioned by the EU’s Committee of the Regions, published last month, found Eurosceptic voting was high in many rural areas, where concerns including over migration and lower economic opportunities boosted populist parties.

An Elabe survey in January showed 87 per cent of French people supported the farmers’ cause. In Poland, nearly eight in every 10 people backed the farmers’ demands, according to a poll by the Institute of Market and Social Research.

The far right in France and elsewhere paint the farmers’ protests as symptomatic of a disconnect between an urban elite and hard-up countryside folk. Farmers are a small group, but the far right thinks it can attract a much wider rural vote by extension, said Teneo analyst Antonio Barroso.

Far-right parties are jostling to be the standard-bearers of farmers’ discontent, using them to illustrate the perceived failure of what they consider elitist green policies, said Simone Tagliapietra, senior fellow at think-tank Bruegel.

“This is pushing mainstream political parties to recalibrate their own agendas,” Tagliapietra said.

In France, farmers are a growing constituency for Marine Le Pen’s far-right National Rally (Rassemblement National) party. She has called for a halt to EU free trade deals.

Asked why farmers were proving so effective in influencing policymaking, agriculture ministers in Brussels last week described farmers as lynchpins of the rural economy.

“Everybody needs to eat everyday,” Finland’s minister Sari Essayah said. “(Farming) is one of those basic sectors we should support.”

Irish Agriculture Minister Charlie McConalogue said Europe needed to learn from the upheaval to food supply chains inflicted by Russia’s war in Ukraine.

“We cannot take food security for granted,” he said.

Environmental campaigners warn of the pace at which environmental policies are being loosened for what they say is political expediency.

Changes to weaken environmental criteria linked to the disbursement of subsidies under the EU’s Common Agricultural Policy (CAP) had taken place at lightning speed without proper consultation, Greenpeace said.

“What they are now presenting as a set of simplification adjustments is literally a CAP reform worked out in a week,” said Marco Contiero, the group’s EU agriculture policy director, somewhat exaggerating what were still speedy proposals.

“This is a political, an electoral card being played,” he said.

A Commission spokesperson said the proposals to amend the CAP were “carefully calibrated, and targeted to maintain a high level of environment and climate ambition”.

The Commission consulted four EU-level farming associations and EU member states before proposing the measures to reduce bureaucracy for farmers, the spokesperson said.

—Additional reporting for Reuters by Philip Blenkinsop in Brussels and Sybille de la Hamaide in Paris

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EU members are debating how to grant Ukraine a further year-long extension of tariff-free access to its markets while also placating farmers who have protested for months against EU environmental rules and cheap imports.

French Agriculture Minister Marc Fesneau told reporters before a meeting with EU counterparts in Brussels that destabilized markets could erode public support for Kyiv, which would neither be in the interests of the EU nor of Ukrainians.

Nearby, farmers jammed the EU district with about 250 tractors, including a main road into Brussels and the square in front of the European Parliament. A number dropped sugar beets, hay and wooden pallets beside a police barricade.

The European Commission has proposed suspending duties on Ukrainian farm produce for a further year to June 2025, with a new “emergency brake” for poultry, eggs and sugar leading to tariffs if imports exceed the average levels of 2022 and 2023.

Oats, maize, groats and honey have since been added to the list.

Fesneau said wheat should also be included and insisted that the brake threshold should be the average of 2021-2023. This would include the year before Russia’s invasion, when Ukrainian exports to the EU were curbed by tariffs and quotas.

Hungarian minister Istvan Nagy said Budapest would only back an extension for Ukraine with limits on wheat.

David Clarinval, the agriculture minister of Belgium, which holds the six-month rotating EU presidency, said he expected a solution to be found in the coming days, without detailing what such a solution would entail.

—Additional reporting for Reuters by Kate Abnett

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