Subsidy schemes paying European Union (EU) farmers to leave land fallow have been suspended today (26 September), following concerns about potential grain shortages and high input prices for drinks producers.

The EU Council of Ministers has abandoned such 'set-aside' payments for the rest of this year and for Spring 2008 sowings.

A rule ordering 10% compulsory fallow land has been reduced to 0% in response to the tightening of the cereals market and the supply shortage caused by recent poor weather which threatens the food and drinks industry, EU Agriculture Commissioner Mariann Fischer Boel said today.

The latest move is estimated to put an extra 10m tones of cereals on next year's yield, easing drinks manufacturers' supply concerns.

A Scotch Whisky Association spokesman said immediately after the decision: "Various factors, including the adverse weather conditions, have impacted on the world cereals market. Today's set-aside rate announcement in Brussels is welcome and we will be monitoring closely its likely implications for the malting barley supply chain."