If farmers don't see state aid or rain by the winter, Cyprus will cease to have a farming sector, one farmer warned parliament yesterday. Speaking before the House Agriculture Committee, general secretary of the National Agricultural Organisation of Cyprus, Michalis Lytras told deputies that the last time Cyprus suffered as bad a drought was in 1973. "But at least back then we had plenty of ground water. Now, we don't. If we don't see rain this season, you are looking at the end of agriculture," he said.

Agriculture Minister Michalis Polynikis told the Committee that the government was working "methodically" to secure EU approval for state aid for the desperate farmers. DISY deputy Georgios Tasou interrupted the minister to accuse the government of dragging its feet over the issue. Polynikis rejected his claim, noting the ministry first approached the EU about the drought last March. He added that the government needed to prepare the groundwork to ensure a positive reply from the EU Council of Ministers.

An application by the government to give state aid to farmers requires unanimous approval at the Council of Ministers. Due to national laws in Denmark, it also requires the approval of the Danish Parliament. Ministry permanent secretary Panicos Pouros stressed that the EU has only approved state aid 15 times in total, one of which was for Cyprus.

Polynikis said the government was pursuing two channels of assistance to the farmers: state aid and EU solidarity funds. Before seeking EU approval, the level of state aid must be decided by the cabinet, depending on the calculation of losses to the farming sector. Solidarity funds, if secured, would be used to improve infrastructure for "exceptional circumstances", not as direct aid to farmers.

The ministry has already met with nine of the 12 sectors to calculate losses from the drought: olive oil, banana, apiculture (bee keeping), cereal, almond, fruit (apples, pears, plums), potato, citrus and vegetable producers. There is disagreement with cereal producers over the level of losses. The producers argue that loss of income must be calculated based on today's global prices for cereal, which are double last year's prices. The ministry seems reluctant to pay compensation for the current high market prices.

A meeting will be held today with the remaining sectors: dairy farmers, vine cultivators and goat and sheep farmers to calculate losses. Only swine and poultry producers will not be included in the compensation package as they don't rely solely on roughages (hay, straw and silage) for animal feed. Once the loss of income has been calculated across the board, the ministry will submit a proposal to the cabinet which will decide the level of compensation to give. This will then be taken to the EU Council of Ministers on September 29 for approval.

According to a spokesman for all farmers, Georgios Kamilaris, the government started off on the wrong footing by trying to secure EU funds first, leading to a great delay in bailing out farmers. He argued that the Treaty of Rome made it clear that the EU would not help farmers over this, as confirmed by the letter sent to President Demetris Christofias by the European Commission President.

"They should have sought approval for state aid from the beginning and not waited until July 17. Farmers have been paying for straw at three times the price since April," he added. The farmers also called on the minister to stop the authorities for taking them to court over debts.

"A farmer has a โ‚ฌ100 water bill and ends up paying โ‚ฌ500 to a lawyer when he doesn't pay it," said Tasou on behalf of the farmers. Committee Chairman Yiannakis Thomas called on the government to stop pursuing farmers' debts in the courts during these difficult times. The minister replied that he was in favour of wiping the debts but that the law did not allow him to do so.