Some good has come out of the soaring cost of food: a pile of one billion unspent euros. The money was earmarked under the Common Agricultural Policy to subsidise farmers in Europe. But the soaring world price of grain and milk has made EU farming competitive and subsidies unnecessary.

Unfortunately, taxpayers are unlikely to see a penny because the European commissioners have other ideas than writing cheques to national treasuries. Instead, the commission wants to give it all away to UN organisations, such as the World Food Programme, to alleviate the food crisis in developing countries. There was some grumbling. Germany, the biggest net contributor to the CAP, complained about the legality of this gesture, but the Commission is confident that everyone will rally round. After all, we never expected to get the money back and few nations like to appear mean when the word “hunger” is mentioned.

This is not the best thing we could do with the unspent funds. It is the easy, superficial thing, putting our spare change in the charity box. There must be concern when one wasteful bureaucracy proposes to hand over our money to other factotums to distribute among countless unnamed projects in dozens of countries. Who will oversee the EU's “facility for rapid response to soaring food prices in developing countries”?

Even assuming that money is not squandered on fleets of Toyota Land Cruisers for UN aid workers, this is a lost opportunity to show that the EU has truly changed its attitude towards agriculture, that it no longer believes that governments should manipulate trade in food. The EU should use the surplus to demonstrate that high food prices can stimulate large-scale, profitable investment in the production and distribution of food in poorer countries.

The timing is judicious because in Geneva this week members of the World Trade Organisation will attempt to stitch together an eleventh-hour trade deal. There have been many cliffhangers since the Doha Round of talks began in 2001 but this could truly be the last opportunity for many years to strike a deal. Washington will soon move into election paralysis; and in Brussels next year a new European Commission will be appointed.

These talks are about freeing up trade in food, just as some nations begin to hoard food in the expectation of shortages. On one side of the Doha talks is a coalition of powerful emerging market nations, led by Brazil and India, which seek big cuts in farm subsidies and agricultural tariffs in the US and EU. In return, the latter insist that developing countries must lower barriers to the import of industrial goods. It is a simple quid pro quo made immensely complicated by factions, special interests and the many hundreds of individual product tariffs that must be addressed. There is a framework deal on the table which Pascal Lamy, WTO director-general, reckons has a chance of success, and Susan Schwab, the US Trade Representative, has promised “enormous cuts” in US farm spending to achieve a breakthrough.

The chance is slim: France has insisted that Europe make no further concessions, undermining the negotiating position of Peter Mandelson, the EU Trade Commissioner, and a single issue is again threatening to hijack the debate: the battle between Latin American and Caribbean bananas.

For more than a generation, the EU has sought to protect banana producers in the Windward Islands from the chill breeze of competition, initially offering quotas that would restrict access by more efficient Central American banana producers. Several rulings by the WTO forced Brussels to scrap the quotas. Instead, the EU imposed heavy tariffs of €176 per tonne, which the Latins, backed by multinationals such as Chiquita and Del Monte, are again challenging.

Should this row scupper Doha it provides us with a signpost to a grim future - a world not unlike the 18th century when European powers squabbled as they divvied up the world into parcels of protected trade. Today we call them bilateral and regional trade agreements; and we already have our privateers from Europe, America and China, too, scouring the coast of Africa in search of rights to trade oil.

Instead of protectionism and taxes, we could insist on free and unfettered trade in food. We could fight for the right of foreign investors to purchase and trade agricultural land, to farm and sell crops at market prices. Instead of handouts to subsistence farmers who never rise above subsistence, the billion euros could be the seed capital for a farming fund that would invest for profit alongside farmer entrepreneurs in Africa, seeking good returns and dividends producing food on a large scale.

Some might call it colonisation, but unlike handouts it might produce food surpluses in places where there are now shortages. That would bring down prices in places where borders are open and where trade is free. It would be political heresy, but that is what we need.

Carl Mortished is World Business Editor of The Times

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