EU officials told Reuters last week that European Commission officials along with delegates from national governments were conducting a study of ways to limit grain intervention - a costly system whereby the EU buys grain from farmers at a guaranteed price. Officials said the process was still at a relatively early stage and that various options were being examined, but French trade sources said this week that the Commission was eyeing tighter restrictions on protein content and specific weight.

They noted the Commission was looking at setting the minimum protein rate for wheat to be accepted into intervention stocks at 10.5 percent. Anything under 10.5 percent would not be eligible for intervention, they said. That would mark a change from the current system, where farmersreceive a discount depending on how far protein drops below the 11.5 percent level.

The Commission is also considering toughening up the average test weight, according to Georges-Pierre Malpel, director general of the French wheat growers' association, AGPB. Malpel is part of a growing chorus of French voices who oppose any changes along these lines, saying they risk creating a system whereby the best-quality grain is sucked into intervention and lower-quality grain heads into the free market. This, he says, would be bad for the domestic milling industry but would also run counter to the notion of intervention being a safety net for producers wishing to offload their grain at a guaranteed price. "It's not a good procedure," Malpel said.

"Intervention is not there to skim off the best quality. It's there to play the role of safety net - to give farmers the guarantee their merchandise can be accepted." Moreover, Malpel said he would oppose any such toughening of intervention standards at a time when theguaranteed intervention price paid to farmers is already scheduled to be cut by 15 percent over the next two years, as part of the recent reforms to EU farm policy.