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Protecting Europe’s #farmers needs more coherent policies

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European agriculture is at a crossroads. As policymakers in Brussels debate the reform of the Common Agricultural Policy (CAP), the European Commission finally rolled out the roadmap to its flagship Farm to Fork strategy, the bloc’s first comprehensive food policy, while a free trade agreement with Mexico, if ratified, could have significant effects on the EU’s agricultural sector. But what’s woefully missing in this flurry of international deal making and regulatory tweaking is protecting farmers from unfair competition and artificially inflated prices.

Strict regulations at home, more flexibility abroad?

The sweeping free trade agreement with Mexico, which the EU finalized in April but which still needs to be approved by the French parliament, has already sparked a fierce backlash from farmers everywhere. Chief among their concerns is the fear that the agreement will usher in unfair competition from Mexican farmers. By exempting nearly all Mexican goods from EU tariffs, the free trade agreement opens the door to some 20,000 tonnes of Mexican beef a year and huge quantities of Mexican pork and poultry—products which were heretofore excluded from the European market over health and safety concerns.

European agricultural associations have been alarmed by the trade agreement and warned that it risks kicking off a “race to the bottom” for environmental and safety standards. At the very moment that the Farm to Fork strategy seeks to raise the standards for Europe’s food by imposing strict standards on farmers, it’s nothing short of perplexing to allow imports of foodstuffs from countries with less stringent regulatory regimes.

Above and beyond the concerns that the free trade agreement could see European consumers ending up with food items that don’t conform to the bloc’s usual health and safety requirements, European producers will naturally be at a disadvantage vis-à-vis Mexican farmers who don’t have to bear the extra costs of complying with European health and safety measures.

Overtaxing essential fertilizers cutting into European farmers’ profits

Even if the new trade deal with Mexico is not ratified, there are other policies which are cramping European farmers’ competitiveness and imposing extra costs on them. While the EU’s agricultural sector is becoming more efficient in its nutrient use, hefty tariffs slapped by the EU on some of the most widely-used nitrate fertilizers, however, represent a significant extra cost which European farmers have warned is harming their ability to compete on the global market. According to French trade unions, fertilizers represent up to 21% of farmers’ costs, and keeps input costs artificially high as most of demand is satisfied by imports.

“It’s a new attack on our revenues and the competitiveness of French producers of grains, oilseed crops and beetroot”, proclaimed one French association of agricultural unions. The producers of these crops are unable to switch products and are unable to pass these increased operational costs to consumers, meaning that they are left with little choice but to eat into their margins.

Margins scraped thin

This is particularly problematic given that European farmers are currently being buffeted on all sides by financial headwinds. Even before the coronavirus pandemic, the latest Eurostat assessment of the performance of the EU agricultural sector, from November 2019, showed farmers’ input costs—for fertilisers as well as for other necessary items like seeds and animal feed—rising at a faster pace than the value generated by the agricultural sector.

The Eurostat report also noted that most EU member states saw declines in real income in the agriculture sector, with some countries, such as Denmark, recording extremely steep declines bringing them in line with 2005 lows. What’s more, farmers’ incomes in the EU-27 have consistently lagged behind the value added in the broader economy—even with substantial support from the Common Agricultural Policy. A steady decline in the agricultural labour pool has further strained the sector, and the CAP’s efforts to address the growing labour shortage have so far yielded mixed results.

Covid-19 highlights the weak spots in European agriculture

The coronavirus pandemic has only exacerbated these structural problems and piled pressure on European farmers. Supply chains were dramatically interrupted. Some farmers were forced to destroy their crops or to let them rot as shuttered borders across Europe prevented seasonal workers from travelling to harvest the produce.

Despite crisis funding from the EU, surveys have indicated that EU farmers’ confidence in the sector has plunged amidst the public health crisis. According to one recent survey carried out by Ipsos, a third of large EU farmers are now questioning the long-term viability of farming as a business, while 65% of the EU’s agricultural producers predict that they will see negative revenue impacts for the next two or three years.

In order to mitigate the effects of the crisis, the farmers polled called on the EU to do more to control price fluctuations and to prevent distorted competition. It was clear even before the pandemic that there were flaws in the EU’s agricultural policy—from allowing foodstuffs from less strict, and therefore less costly, regulatory regimes to be imported through free trade agreements, to imposing extra costs on European farmers in order to protect European fertiliser producers—which were whittling away already-narrow margins in the bloc’s agricultural sector. With the industry in crisis amidst the coronavirus pandemic and the accompanying economic downturn, the EU can no longer afford to place these burdens on its farmers’ shoulders.

Agriculture

Commission organizes first Farm to Fork 2020 conference 

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On 15 October European Green Deal Executive Vice President Frans Timmermans, together with  Health and Food Safety Commissioner Stella Kyriakides and Agriculture Commissioner Janusz Wojciechowski opened the Farm to Fork 2020 conference - Building sustainable food systems together. The virtual conference will also take place today (16 October), it being World Food Day. This conference is the first in what will be an annual gathering of European stakeholders willing to engage and help shape the EU's path towards sustainable food systems.

More than 1,000 stakeholders across the food value chain, public authorities, international and civil society organizations, as well as members of the public have registered to join the debate and contribute to the implementation of the Farm to Fork Strategy, adopted earlier this year. At the heart of the European Green Deal, the strategy aims at a fair, healthy and environmentally friendly food system. The event will also provide a forum for discussion on the challenges and opportunities linked to the transition to sustainable food systems, as well as on possible further areas of intervention The whole event is accessible via web streaming.

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Agriculture

Commission publishes public opinion survey on EU food and farming

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Three out of four Europeans are aware of the Common Agricultural Policy (CAP) and consider all citizens benefit from it, according to the latest EU-wide Eurobarometer survey of public opinion about agriculture and the CAP, published today by the European Commission. The survey shows that more EU citizens are aware of the CAP (73% today, six percentage points more than in 2017) and believe that the CAP benefits all citizens, not only farmers (76% today, 15 percentage points more than in 2017).

Furthermore, citizens' views on what the main objectives of the CAP should be remain similar to the findings of the 2017 survey. Most believe that providing safe, healthy food of high quality should be the main objective, representing the view of 62% of respondents, same as in 2017. An increased number of Europeans think that the EU is fulfilling its role regarding the key objectives of the CAP. In comparison with 2017, all areas including food security, sustainability, safe and quality food increased by at least five percentage points.

More citizens are now aware of the organic farming logo, covering 56% of respondents (up 29 percentage points compared to 2017). Even though a growing share of citizens believe that agriculture is one of the major causes of climate change (from 29% in 2010 to 42% in 2020), the majority of citizens believe that agriculture has already made a major contribution to fighting climate change, with 55% holding this view, up from 46% in 2010. The survey was conducted from August to September 2020, including more than 27,200 respondents in 27 member states. The full report of the EU-survey will be published later in November. More information is available online.

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Agriculture

Publication of latest agri-food trade figures: Slight increase in EU27 agri-food trade despite Coronavirus and Brexit challenges

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The latest monthly agri-food trade report shows that between January and May 2020, the total value of EU-27 agri-food exports rose by 2% compared to the same period in 2019, reaching €75.8 billion, while the value of imports increased to €52.7bn (a rise of nearly 1%).

However the monthly values of EU-27 exports and imports in May 2020 decreased by 7.5% and 4.5% respectively below the level of the previous month. The EU enjoyed an agri-food trade surplus of €23.1 billion during this period, an increase of 5% compared to the corresponding months of 2019. The growth of EU exports was driven by exceptionally high sales of pig meat to China and of cereals to the Middle East and North Africa (MENA) region.

The value of EU exports to China rose by €1.93 billion during this period. In addition to pig meat, the other EU agri-food products in high demand from China were wheat, offal meat, and infant food. Strong demand for EU barley and wheat led to increases in exports to the MENA region. The total value of EU agri-food exports to the UK fell by €899 million, while, imports from the UK dropped by €807m. Declines were also noted in the value of the EU's imports from the USA as well as EU export values to the USA.

The full report is available online and more information on agri-trade policy is available here.

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