at the heart of a battle over the bloc's long-term budget. Campaigners and many world leaders agree subsidies in wealthy countries price African producers out of world markets and condemn the continent to poverty. But G8 leaders are not expected to make progress on trade at their summit in Gleneagles, where the focus will be on ending African poverty and addressing climate change. Fischer Boel said Europe had put in place the biggest ever reform of the Common Agricultural Policy (CAP). Europe was ready to bind that reform into a deal at the World Trade Organisation, provided the U.S. did the same, she said in a statement. EU farm subsidies were no longer trade-distorting while U.S. payments are still production-linked and "seriously distort trade", she said. But Bush said: "We've got agricultural subsidies, not nearly to the extent that our friends in the EU have." Fischer Boel said the EU had pledged to phase out all export subsidies. "But before agreeing on an end date, we need our partners, in particular the U.S., to do the same, by phasing out export credits and the use of dubious 'food aid' to dispose of surpluses -- which is not a way to ensure long-term food security for developing countries," she added. --SP 2308 Local Time 2008 GMT
