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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

PAN Europe asks: Is German EU Presidency set to knife the Farm to Fork Strategy?

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Ahead of a gathering of experts from EU member states to discuss the implementation of the “Sustainable Use of Pesticides Directive” (SUD), PAN Europe warns that national plans towards reduction in pesticide use are not only insufficient, but could derail the Farm to Fork Strategy entirely. The three-day online workshop, 'Better training for safer Food: Experiences on SUD, its current implementation and possible future policy options', taking place from 17 to 19 November 2020, is part of the revision process of the Directive 2009/128/EC that is already two years overdue, and is now scheduled to happen by 2022.

In May 2020, the European Commission published a report stating that most EU countries’ national action plans “lack ambition and fail to define high-level, outcome-based targets” for reducing the potential risks posed by pesticides. “The poor quality and lack of ambition of member states to reduce the risks posed by pesticides should not only be addressed in a workshop but in the front of the European Court of Justice. It simply can’t be that member states fall short on the requirements of their own legally binding legislation and turn a blind eye to the biodiversity crisis that Europe is facing,” said PAN Europe President Francois Veillerette.

“The European Commission should start infringement procedures against countries that fail to implement the Sustainable Use of Pesticides Directive,” he added. The Council, currently under Germany’s Presidency, has so far refused to acknowledge member states’ grave lack of effort. After gaining access to a draft document last week, PAN Europe discovered that the EU Council, in the report on SUD implementation to be released, is instead calling for more soft measures such as training and research, and is completely sidelining all discussions on the idea of fixing EU-wide pesticide reduction targets as clearly addressed in the European Commission’s report.

“The Council’s attitude is in direct contrast with what European citizens already understand: Europe will not have clean water and restore its biodiversity without reducing its use of pesticides. This disconnect between the EU’s political ambitions and the practices of many individual member states urgently needs to be addressed,” said Henriette Christensen, Senior Policy Adviser Agriculture for PAN Europe.

“After the recent missed opportunity of the European Parliament to transform European agriculture through the CAP reform, and the EU thus turning its back on a sustainable agricultural model, the pesticides reduction objective is unequivocal: it requires the integration of the EU-wide 50% reduction target from the Farm to Fork strategy into both into the CAP and the SUD,” said Christensen.

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Agriculture

Common Agricultural Policy reform: First trilogue 

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On 10 November, Executive Vice President Timmermans and Commissioner Wojciechowski represented the Commission at the first trilogue on the Common Agricultural Policy (CAP) reform. The trilogue will cover all three proposals - the Strategic Plan Regulation, the Horizontal Regulation and the Common Market Organization (CMO) Amending Regulation.

The European Parliament, the Council and the Commission, will have the opportunity to put forward their positions on the key elements of the three Regulations, and agree on the working arrangements and indicative timeline that will apply to the ensuing political trilogues and preparatory technical meetings.

The Commission considers the CAP to be one of the central policies for the European Green Deal and it is thus steering the process at the highest level in close coordination with other policy areas. The Commission is determined to play its full role in the CAP trilogue negotiations, as an honest broker between the co-legislators, and as a driving force for greater sustainability to deliver on the European Green Deal objectives.

The aim is to agree on a Common Agricultural Policy that is fit for purpose and effectively responds to the higher societal expectations in terms of climate action, protection of biodiversity, environmental sustainability and a fair income for farmers.

The Commission presented its proposals for a future CAP in June 2018, introducing a more flexible, performance and results-based approach that takes into account local conditions and needs, while increasing EU level ambitions in terms of sustainability.

Higher environmental and climate ambitions is reflected by a new green architecture including the new eco-schemes system. The Commission highlighted the compatibility of its proposals with the European Green Deal in a report published in May 2020.

The European Parliament and Council agreed on their negotiating position respectively on 23 and 21 October 2020, enabling the start of the trilogues.

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Africa

Investment, connectivity and co-operation: Why we need more EU-African co-operation in agriculture

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In recent months, the European Union has demonstrated its willingness to promote and support agricultural businesses in Africa, under European Commission’s Africa-EU Partnership. The Partnership, which stresses EU-African co-operation, especially in the wake of the COVID-19 pandemic, aims to promote sustainability and biodiversity and have championed promoting public-private relationships across the continent, writes African Green Resources Chairman Zuneid Yousuf.

Though these commitments apply to the entire continent, I would like to focus on how increased African-EU co-operation has helped Zambia, my country. Last month, European Union Ambassador to Zambia Jacek Jankowski announced ENTERPRISE Zambia Challenge Fund (EZCF), an EU-backed initiative that will award grants to agribusiness operators in Zambia. The plan is worth an overall total of €25.9 million and has already launched its first call for proposals. In a time where Zambia, my country, is battling serious economic challenges this is a much-needed opportunity for the African agribusiness industry. More recently, just last week, the EU and Zambia agreed to two financing agreements that hope to boost investments in the country under the Economic Government Support Programme and the Zambia Energy Efficiency Sustainable Transformation Programme.

Europe’s collaboration and commitment to promoting African agriculture is not new. Our European partners have long been invested in promoting and helping African agribusiness realise their full potential and empower the sector. In June of this year, the African and European Unions launched a joint agri-food platform, which aims to link African and European private sectors to promote sustainable and meaningful investment.

The platform was launched off the back of the ‘Africa-Europe alliance for sustainable investment and jobs’ which was part of European Commission President’s Jean Claude Junker’s 2018 state of the Union address, where he called for a new “Africa-Europe alliance” and demonstrated that Africa is at the heart of the Union’s external relations.

The Zambian, and arguably the African agricultural environment, is dominated largely by small-to-medium sized farms that need both financial and institutional support to navigate these challenges. In addition, there is a lack of connectivity and interconnectedness within the sector, preventing farmers to connect with each other and realise their full potential through cooperation.

What makes EZCF unique among European agribusiness initiatives in Africa, however, is its specific focus on Zambia and empowering Zambian farmers. Over the past few years, the Zambian farming industry has grappled with droughts, lack of reliable infrastructure and unemployment. In fact, throughout 2019, it is estimated that a severe drought in Zambia led to 2.3 million people requiring emergency food assistance.

Therefore, a solely Zambia-focused initiative, backed by the European Union and aligned with promoting increased connectedness and investment in agriculture, not only reinforces Europe’s strong connection with Zambia, but will also bring some much-needed support and opportunity for the sector. This will undoubtedly allow our local farmers to unlock and leverage a wide range of financial resources.

More importantly, the EZCF is not operating alone. Alongside international initiatives, Zambia is already home to several impressive and important agribusiness companies that are working to empower and provide farmers with access to funding and capital markets.

One of these is African Green Resources (AGR) a world-class agribusiness company of which I am proud to be the chairman. At AGR, the focus is to promote value addition at every level of the farming value chain, as well as look for sustainable strategies for farmers to maximise their yields. For example, in March this year, AGR teamed up with several commercial farmers and multilateral agencies to develop a private sector financed irrigation scheme and dam and off grid solar supply which will support over 2,400 horticultural farmers, and expand grain production and new fruit plantations in the Mkushi farming block in Central Zambia. Over the next few years, our focus will be to continue promoting sustainability and the implementation of similar initiatives, and we are ready to invest alongside other agribusiness companies that seek to expand, modernise or diversify their operations.

Though it appears that the agricultural sector in Zambia may be facing challenges in the years to come, there are some very important milestones and reasons for optimism and opportunity. Increased cooperation with the European Union and European partners is an important way of capitalizing on opportunity and ensuring that we are all doing as much as we can to help small and medium sized farmers across the country.

Promoting increased interconnectedness within the private sector will help ensure that small farmers, the backbone of our national agricultural industry, are supported and empowered to collaborate, and share their resources with larger markets. I believe that both European and local agribusiness companies are heading in the right direction by looking into ways of promoting agribusiness, and I hope that together, we can all sustainably promote these goals on the regional and international stage.

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