Unspent EU farm aid to go to Africa: Barroso

TOYAKO, Japan (Reuters) - The European Union will channel 1 billion euros ($1.6 billion) in unused European farm subsidies to African farmers as part of its response to the global food crisis, the head of the EU executive said on Monday.

"The EU really can give a boost to agriculture in developing countries," European Commission President Jose Manuel Barroso said on the first day of a meeting of G8 rich nations' leaders in northern Japan, where soaring food prices are high on the agenda.

The EU executive has previously outlined its intention of taking up to 1 billion euros of unspent EU farm subsidies between now and the end of 2009 and using the money for a fund for seed and fertilizer and other agriculture projects in Africa.

That money will come on top of 550 million euros that the EU has freed up in emergency aid in response to the food crisis.

The new proposal will have to be approved by ministers from the EU's 27 countries and the European Parliament, and the new fund could begin operating from January, EU officials have said.

"A lot of things about Europe's agricultural policies are not great for Africa, but this is a really positive step," said Oliver Buston, a spokesman for the anti-poverty One Campaign.

"We hope it will encourage EU member states to raise their own commitment bilaterally and also encourage the rest of the G8 to do more."

Europe's Common Agricultural Policy eats up more than 40 billion euros a year in subsidies and other farm spending.

Some development campaigners have long criticized the EU's farm subsidies as damaging for poor countries unable to compete.

The World Bank has estimated that about $10 billion is needed in short-term aid to help poor countries face the global food and fuel price crisis.

The G8 in 2005 agreed to double aid to Africa by 2010 as part of a wider drive to alleviate global poverty, but a compliance panel has found that under current spending plans the group will fall $40 billion short of its target.

Italy came under fire from anti-poverty campaigners at the G8 summit after the government of Prime Minister Silvio Berlusconi recently announced plans to cut Italian development aid by 170 million euros annually for the next three years.

Italy is due to take over the G8 presidency next year.

"Our country...will take over the leadership of the G8 without the international legitimacy it needs," said Luca De Fraia, ActionAid's head of policy.

(Reporting by William Schomberg and Paolo Biondi; Editing by Hugh Lawson)