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Posted by Richard Thursday, January 29, 2009

France has broken the EU's state aid rules by paying more than €330 million to its fruit and vegetable sector over 10 years, helping various producer organisations to rig market prices and increase farmers' income.

The EU commission has been investigating this since 2005 and has now concluded that the aid in question "cannot benefit from an exemption ... and that they are incompatible with the common market." France, therefore, should "proceed to recover the money."

France paid the cash between 1992 and 2002 to ease a glut of fruit and vegetables on the domestic market by supporting prices, paying for temporary stocking, funding product destruction and giving aid for processing.

It may also have subsidised sales of fruit and vegetables outside the EU at times of crisis. All of this had favoured France's fruit and vegetable production to the detriment of that of other EU countries, effectively creating a national market policy superimposed over the EU's own market policy - and also interfering with it.

And, when France, as always, tells the EU commission to go and play with its marrows, what then?

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