The European Union is giving US $9.6 million for food security and poverty alleviation in Mozambique, news reports said on Monday. "We are particularly concerned with food security and poverty in rural areas," minister of agriculture and rural development Helder Muteia told AFP.

The money will be used to hire private agri-industrial companies and other organisations to help small farmers develop cashew and cotton crops, Muteia said. That would include helping small farmers recover cashew trees that fell out of productive use during the country's 16-year civil war. Mozambique's cashew industry has also suffered from trade liberalisation imposed by the World Bank and the International Monetary Fund (IMF), which forced most processing plants into closure.

Cotton and cashews are Mozambique's two largest cash crops, and the nation's largest foreign currency earner after prawns.