BRUSSELS - Europe's farm chief has proposed ending the EU's rule that farmers leave 10 percent of their land fallow, part of a strategy to temper soaring grain prices and increase supplies, the EU executive said on Thursday.

From 2008, if EU agriculture ministers agree, the rate of obligatory set-aside -- as that subsidy-eligible farmland is known -- would be set at zero, although farmers would still be able to set aside part of their arable area voluntarily.

This would have an immediate effect on autumn 2007 and spring 2008 sowings, the Commission said in its proposal.

The concept of set-aside was introduced as a supply management tool at a time when the EU's potential grain production exceeded the available market outlets.

It was introduced on a voluntary basis from 1988/1989 but became compulsory after a major farm reform in 1992. From 1999/2000, the rate was set permanently at 10 percent. Set-aside land now covers around 3.8 million hectares.

"If the set-aside rate was set to 0 percent, the effective return of land could be between 1.6 and 2.9 million hectares," the Commission proposal said.

"Considering average trends, it is likely to bring around 10 million tonnes of grains onto the market," it said. If farmers maximised their land to produce cereals, not other crops like oilseeds, that quantity could reach 17 million tonnes, it said.

Fischer Boel's proposal has run into opposition from environmental groups concerned that the abolition of set-aside with no replacement may devastate bird and insect populations.

Millions of farm birds could be left without enough food and breeding sites next spring if set-aside disappears, they say.

Even the Commission's own environment unit had some initial misgivings, saying strips of set-aside land should be maintained along rivers and lakes because of natural habitats.

Fischer Boel has made it clear on many occasions that she considers set-aside land to be an anachronism in modern farm policy, and is expected to recommend its abolition in a review of the 2003 reform due for publication in November.

With few exceptions, set-aside land must not be used for any form of farm production, including horticulture and grazing.

Farmers usually have to establish a "green cover" on set-aside land by sowing grass varieties or other cover for wild birds. That green cover has to be cut away within a certain period, with cuttings left on the ground to rot into the soil.

Once the set-aside period is over, the land may be harvested for hay or silage, and may also be grazed with animals.