BRUSSELS (Reuters) – The European Union plans to divert some of the subsidies earmarked for farmers growing tobacco to finance campaigns that aim to make consumers more aware of its harmful effects, the EU’s executive body said yesterday.

EU tobacco subsidies are due to be scrapped in 2010, the end of a four-year phase-out agreed upon by farm ministers in 2004.

In the meantime, the European Commission wants to channel up to 5 percent of that aid into health campaigns, since funding for those campaigns dried up at the end of last year.

At present, the EU spends about –321 million ($477.2 million) a year to subsidize tobacco growing, a fraction of the annual budget of EU farm policy, worth around –44 billion.

Following the 2004 reform, the EU tobacco budget has fallen significantly – by about two-thirds. The biggest share goes to Greece and Italy, where tobacco is mostly grown in poor areas.

EU tobacco production is small by global standards, accounting for just over 5 percent of global output, but the bloc still ranks as the world’s fifth-largest producer.

Part of the reform deal was for the EU to create a so-called tobacco fund, using some of the subsidies earmarked for tobacco farmers, to finance information campaigns for improving public awareness of the harmful effects of tobacco consumption.

Since the fund was only supposed to exist until the end of 2007, EU Agriculture Commissioner Mariann Fischer Boel now wants to extend its life through 2008 and 2009, to coincide with the phase-out of tobacco subsidies altogether.

“Thanks to the reform, tobacco subsidies will be phased out by 2010. But in the meantime, I think it’s useful to continue using some of the money to finance actions to inform people about the harmful effects of smoking,” she said in a statement.

If EU agriculture ministers agree to her proposal, the fund could be worth up to –16.9 million in each year. They are expected to discuss the idea in the next few months.