BRUSSELS/HAMBURG, July 2 (Reuters) - The European Commission has approved a 600 million euro ($782.1 million) government aid scheme to compensate farmers in southern and eastern Germany hit by the worst floods in a decade.
In a statement on Tuesday, the EU's executive said the compensation scheme - which can cover up to 100 percent of lost income in 2013 and 2014 or damage to buildings, equipment, crops and livestock - complied with European Union state aid rules.
"This means that Germany may now start paying compensation for the damages caused by the recent floods without prior (EU) authorisation," the Commission said.
In total, the German government has agreed to spend up to 8 billion euros ($10 billion) to repair damage caused by the floods in June, which forced thousands of people from their homes.
Most of the farmland within the flooded areas is used for grazing livestock or growing fruit and vegetables and commodities traders have said the damage has not had a significant effect on German grain production.
Germany will harvest 24.18 million tonnes of wheat in 2013, up from 22.33 million in 2012, with favourable weather in May and June helping crops, Germany's leading grain trader Toepfer International said on June 25.
This was up from 23.35 million tonnes Toepfer had forecast in May before the floods. ($1 = 0.7671 euros) (Reporting by Charlie Dunmore in Brussels and Michael Hogan in Hamburg; Editing by David Holmes)