Spanish farmers hold fuel protest

Thousands of Spanish farmers marched through Madrid on Thursday to demand lower diesel tax to cope with record fuel costs that they say are helping drive them out of business.

Fishermen, taxi drivers and lorry drivers across Spain have demonstrated over rising fuel costs over the last month, leaving food shelves empty and sparking travel chaos for millions.

"This is the last straw. If good spring rain hadn't arrived this year and last, we would already have gone bust," said sugarbeet farmer Evaristo Ortega. "The price of diesel and fertiliser is impossible to bear."

The farmers said they were also suffering from low producer prices.

Like Spain's fishermen, the farmers, who brought traffic to a standstill on the capital's busiest road, said they would give away tonnes of free food to help consumers who were struggling with record grocery bills.

A similar handout by fishermen in late May ended in scuffles between bargain hunters.

Diesel prices have shot up to around 1 euro ($1.56), from 60 cents a year ago, farmers said as they marched past soccer club Real Madrid's Bernabeu Stadium clanging cow bells and bearing banners reading: "For the future of our countryside".

In Brussels, Germany and other European Union member states said they would reject a fuel tax break plan sought by France to cushion rising oil prices hours before a summit to discuss them.

A senior French official said President Nicolas Sarkozy would ask EU peers to back a reduction in value-added tax on petrol across the 27-nation bloc to help fishermen, farmers and truckers hit by soaring fuel bills.

Pablo Masedo, who owns a livestock farm in the shadow of Madrid's Guadarrama mountain range, carried a banner saying: "Madrid livestock farmers; a species threatened by extinction."

Feed prices had shot up he said, but his beef was selling for 15-20 percent less this year because of a glut of cheap Latin American meat and tough deals with big retailers. Masedo loses 100 euros on every cow sold at the moment, he said.

Farmers were due to hand out 2,800 litres of Galician milk, 10 tonnes of vegetables from the southern province of Almeria and 1,000 bottles of olive oil from Andalucia, farm union organisers Asaja said.