EU hop growers will continue receiving subsidies equivalent to £290 per hectare for at least two more years under a proposal made by the European Commission. However, it is still to be approved by EU agriculture ministers and comes in the face of demands at the WTO negotiations on food and drink products that the EU slashes its agricultural subsidies.

In recommending the two-year extension, the Commission says the present market organisation for hops has brought production into line with demand "both in quantitative terms through a reduction in the area planted - and in qualitative terms via a change in the varieties planted, particularly to satisfy demand in the beer brewing industry."

Before the present measures expire at the end of 2002 the Commission will review the whole regime, taking into account the substantial hop production in countries seeking to join the EU in 2005.

It will also assess the role of producer groups, which have the right to retain up to 20% of the Community aid in order to help finance diversification, technical innovation and marketing.

Germany is by far the EU's largest hop producer, with 80%t of the total area under cultivation. Only the UK, with 10%, comes close.

EU hop production fell by 18 per cent to 34,600 tonnes between 1995 and 1999 while revenue was down by 4 per cent.