“The future of agriculture and food” deserves better

 

PRESS RELEASE

29 November, 2017

“The future of agriculture and food” deserves better than a technocratic discussion about a proposal to renationalize.

The “New Delivery Mechanism”, which is central in the European Commission’s communication on the future of the Common Agricultural Policy (CAP), presented on 29 November, would pave the way for a lesser role for Europe, greater complexity for national administration, competition distorsions for economic actors and less efficiency when it comes to climate and environmental ambition. However, “the future of agriculture and food”, and the challenges facing the European food industry as a whole, instead require Europe to deliver a new and ambitious CAP, which in turn requires the Commission to fulfil its responsibility, not shirk it.

Pushing subsidiarity to its limit would simplify matters for the Commission only. It would transfer the policy burden to Member State administrations. It would threaten farmers’ livelihoods by removing the existing level playing field and exposing them to internal economic and environmental dumping. It would turn the clock back on environmental ambitions because Member States would be able to sacrifice standards to gain in competitiveness.

Farm Europe will continue to be a source and standard bearer for innovative and ambitious proposals for a European agriculture that leads the world by pioneering simultaneous economic and environmental performance ‒ in particular by harnessing the digital revolution. In the coming weeks and months, the campaign “Keep the C” will contribute to highlight the importance of a truly common and efficient European policy. If it is to meet the challenges of tomorrow, agriculture needs more Europe, not the abandonment of all collective ambition.

 

The “New Delivery Mechanism”, what is being proposed?

  • The current situation. Today, 70% of the CAP budget – the 1st pillar – is devoted to community measures, with eligibility criteria that apply to all Europe’s farmers (in particular for basic aid, green aid and coupled payments). This support functions as a coherent whole, both economically, by supporting farm incomes, and environmentally, by ensuring the use of environmentally sound agricultural practices. The whole of Europe is subject to a common core of environmental standards, which all farmers abide by. The room for manœuvre available to Member States is limited and governed by common European rules that are agreed ex ante (i.e. prior to implementation). In addition, 30% of the CAP budget (2nd pillar) is administered by Member States using a flexible programmatic project-based approach. The aim is to take local characteristics and the diversity of local contexts, such as environmental or investment factors, into account.
  • What is being proposed? With the “New Delivery Mechanism”, the European Commission is envisaging giving Member States individual discretionary power to determine the rules for allocating and managing both Pillar 1 and Pillar 2 aid. 100% of the CAP budget would be managed nationally, instead of under a common European framework. The Commission’s role would be limited to supervising national strategies and, where applicable, imposing penalties in cases where a Member State fails to meet its main targets as set out in national performance indicators. Member States or regions would be accountable for the use of funds. They would devise their own strategies as well as the eligibility criteria for obtaining CAP funding – including economic and environmental criteria. The CAP would resemble an ‘agricultural and rural cohesion policy’, with 27 different, even divergent, agricultural strategies.

What would be the implications of the ‘New Delivery Mechanism’?

The economic implications:

  • Under the guise of subsidiarity, this idea means, in reality, a transfer of the CAP’s reactor core to the national level, and as such would constitute a significant step towards a renationalizationof the CAP. Why?
  • In practice, negotiations at community level would be limited to agreeing on a few macro objectives that individual Member States would need to meet in order to access the community budget. Europe’s policymakers would agree on overarching performance indicators for the CAP as a whole.
  • In practice, the distribution of the bulk of funding between sub-sectors and between farmers, and in particular the ‘direct payments’ envelope would no longer be managed at community level ‒ decisions would be taken either nationally or
  • A genuine risk: each Member State or region would be free to concentrate its CAP envelope on a handful of priority sub-sectors in order to try to weaken the competition in other Member States and get the upper hand in a target market using directly or indirectly subsidized prices ‒ thus undermining value creation.
  • A question: Who could believe that a European civil servant undertaking an ex post analysis of a strategy adopted after a democratic vote in a national/regional assembly would have sufficient political weight to block a project, even if it conflicted with the general European interest? As experience with the Cohesion Fund has shown, the Commission is only able to obtain marginal adjustments.
  • A question: A substantial proportion of the CAP budget is currently used to support farmers’ incomes. Arrangements for this are based on European criteria. Considering the diversity of territories, sub-sectors and types of farm, is a single farm income target level realistic (a Treaty objective)? Would there be equitable treatment on a European scale? Would there be punitive clearance of accounts and penalties for those Member States in which agricultural income fell? Could the latter ever be credible? We might be forgiven for thinking that the architects of this proposed Mechanism have not studied its implications with sufficient due diligence.

The environnemental implications :

  • In agriculture, the environment is a key factor in farm competitiveness, a fact which has in the past led to an overuse of natural resources, especially in the 80s and 90s. Climate change and environmental goals are going to take centre stage among the challenges that tomorrow’s agriculture must meet ‒ so if Europe were to abandon the ambition of common standards, what would the consequences be?
  • In practice, abandoning the acquis of a common set of rules at the European scale – i.e. the greening of the CAP – would amount to abandoning the clear framework that creates a level playing field for all Europe’s farmers, while ensuring the sector as a whole meets its environmental responsibilities. And it is currently possible for farmers to go further by participating in rural development programmes that offer positive and complementary project opportunities.
  • In practice, by abandoning the principle of a common set of rules that condition access to CAP funding, the European Commission is abdicating its responsibility to ensure that European agriculture develops and grows in a more sustainable way on the scale of the Continent. Deviations in sensitivity to these issues would inevitably lead to divergences in the degree of ambition and competition would lead to a vicious circle of policies bidding down environmental standards.
  • An example: in order to meet overarching European targets, Member States would be able to concentrate their efforts on a handful of high value (in terms of target figures) natural areas – natural parks or Natura 2000 protected areas – and use this as cover to reintensify (production) elsewhere. The point being that the quality of the environmental cannot be reduced to an arithmetic average of national or regional indicator values.
  • A question: the digital revolution currently forging ahead offers an opportunity to combine simplification with environmental ambition. Why not seize this opportunity ? Do we really want to squander a chance to jointly devise and implement an intelligent CAP, one which is genuinely innovative, and which combines environmental sustainability with economic competitiveness for the benefit of all Europe’s territories?

 

A window of opportunity for agriculture has opened up ‒ can we seize it?

TAN_3241This weekend, the 2nd edition of the Global Food Forum, organised by Farm Europe in partnership with Confagricoltura, brought together around 200 economic and political leaders from 13 Member States in Susegana (Italy) in order to discuss the future of food systems and EU policies towards them.

The Forum was an opportunity to identify and flesh out the most effective policy levers to boost the economic and environmental performance of the EU’s food supply chain ‒ to go beyond the conflict between these goals.

The consensus among participants was that a genuine European approach is needed to build a common and shared ambition, to secure the integrity of the internal market and to ensure solidarity between territories.

Once it has been definitively adopted, the new ‘agricultural Omnibus’ (1) ‒ which was unanimously welcomed by the participants ‒ offers Member States an immediate opportunity to build such an approach, which they must seize. The new provisions on competition rules and risk management offer a chance not only to strengthen agriculture’s ability to cope with climate and market risks, but also to rebalance the food supply chain.

Direct payment must continue to play an important role and new financial tools such as insurance and mutual funds need to be further developed. But in addition to these short to medium term dynamics, the Forum concurred that the European Union should take the opportunity of the next reform of the CAP and of the discussions on the post-2020 Multi-Annual Financial Framework to develop enhanced crisis management mechanisms so that agriculture is fully prepared for even the most devastating events that may occur in the future. The creation of a strong pluriannual crisis reserve should be considered in the context of the up-coming budgetary discussions.

The Forum also explored how to meet sustainability goals. In this regard, economic stakeholders are willing to contribute to the environmental challenge with practical solutions for reducing the footprint of food production and contributing to climate change mitigation. If we are to move forward in unison and achieve tangible results on the ground the solutions will need to be based on a renewed confidence in science and innovation, and on investments.

The development of precision and digital farming as well as technologies such as New Plant Breeding Techniques should be encouraged and, in the meantime, the emergence of the EU bioeconomy should not be undermined by political decisions that depart from scientific evidence and guidance ‒ including on very concrete issues such as EU-sourced biofuels, which should be part of the EU’s sustainable energy mix.

TAN_1850To make this possible the EU needs to propose a clear and comprehensive policy architecture, including via the Common Agricultural Policy. But the EU needs to be careful : subsidiarity and flexibility should not lead to a weakening of the level playing field between farmers, and any additional distorsion of competition in the internal market must be avoided, in particular when it comes to environmental regulations. The first pillar of the CAP should continue to play its role as a fully integrated tool, providing a clear framework for all farmers across Europe.

The final report of the 2nd Global Food Forum, which draws on a year of consultation and discussion among stakeholders, will be presented to EU decision-makers at the European Parliament in February.

(1) Based on the basis of the inter-institutional agreement agreed on October 12.

Omnibus: a significant step forward for the Common Agricultural Policy

The compromise reached yesterday between the 3 institutions of the European Union on the agricultural component of the Omnibus regulation is a significant step forward for the Common Agriculture Policy. It is the equivalent of a mid-term review of the CAP and a demonstration that in a European Union whose political gears are in motion and which is closer to the reality on the ground, the European Parliament plays a central role by inspiring new policy directions. This progress has been achieved thanks to the ability of key Members of the Assembly to table strong and well-designed proposals – in particular Michel Dantin (EPP) and Paolo de Castro (S&D) on this issue, building on the positive initial proposal tabled by Commissioner Phil Hogan.

The Omnibus agreement will secure important improvements via competition policy and offer a vision of the future of the EU’s agricultural sector based on both economic realities and strategic goals. It paves the way for a substantial rebalancing of power within the EU food chain by extending the 2010 milk package to all agricultural sectors. Farmers will get the right to have contracts that set prices and volumes clearly. They will be authorised to join forces to sell their products together, setting the quantities and quality standards within producers’ organisations, thus acting as a single economic entity like other players in the food chain (processors & retailers). In addition, the dialogue within the food chain will be enhanced by new prerogatives for Inter-Branch organisations, in particular for discussing the share of added value, whether markets are going up or down.

The enhanced dialogue and competition rules should put an end to the current “battle field” situation and create the conditions for more solidarity among the players in order to better cope with market volatility.

On the resilience and risk management side, the provisions in the Omnibus offer a paradigm switch for the CAP. The package will enable a more credible and improved management of climate risks at European level, which is an absolute necessity in the context of climate change. It will now be up to the Member States all across Europe to take the measure of this opportunity and dedicate adequate resources to climate insurance ‒ the condition for making these schemes more attractive.

The European framework will offer the possibility of triggering insurances at 20% losses and the co-financing of the premium at 70%. These schemes are cost effective: impact assessments have shown that helping farmers all across the European Union to be effectively protected against frost, drought and floods would not require more than 5% of the current CAP budget, which should be set against the massive improvement in the protection of farmers against one of their principal and constant risks.

When it comes to market risks, the improvement of the sectoral Income Stability Tools initially proposed by the European Commission will open the way for specific sectors (producers and related processors) to develop schemes that protect farm incomes in the event of a crisis and in a pragmatic way. These schemes will be based on indexes, which enable a rapid response, they will target the specific activity (sugar, milk, etc) covered by one fund at farm level, not the entire activities of the farms with thresholds at 20% losses, and there will be CAP co-financing for annual contributions. It will be incumbent on economic actors to build these new stabilisation tools and up to Member States to foster their deployment via their rural development programmes.

It should be noted that, in the European Union, 1.1 million farms (20% of all EU farms) produce more than 88% of our food – most of these farms are family and medium to small-size farms. This figure (20% of EU farms) include all the farms in Europe over 19 hectares. These farms, connected to the local, regional, European or global markets, have seen a sharp decrease in their competitiveness over recent years. They urgently need to get back on the right track so they can invest and get ready to cope with future challenges, including when it comes to environment protection.

A truly common “risk management-oriented CAP” will have a decisive role to play in the coming years, offering farmers – as entrepreneurs who are more and more Live Science Managers as well – all the tools they need to enhance both the economic and the environmental sustainability of their farms.

The package now needs to be adopted in the broader context of the Financial Omnibus later this year, in order to be implemented from the 1st January 2018. Then, it will be up to the Member States to adapt their national programmes and to all relevant stakeholders to seize the opportunities offered by the new EU framework.

A promising step forward in the debate on the Renewable Energy Directive

Farm Europe’s Green Energy Platfrom welcomes the opinion approved yesterday by the agricultural committee of the European Parliament on the Renewable Energy Directive. This opinion, going beyond ideology and traditional political barriers is a clear recognition of the capacity of the European Agricultural sector to act as a sustainable energy provider. It’s a positive signal for both, EU citizens that must be in a position to rely on a forward looking farming sector, able to cope with climate change, and EU farmers that must be recognised as a cornerstone of the emerging bioeconomy.

A decade ago, the European Union set regulatory measures to tackle climate change and EU dependency on fossil fuels, via minimum targets, which allowed the development of a biofuel sector in Europe, without any EU subsidies. At that time, the assumption was that the traditional oil companies which are in direct contact with EU consumers would never give room for this source of renewable and cleaner energy without a clear mandate established by law. This assumption remains valid today.

The societal benefits from biofuels made from EU feedstocks (cereals or oilseeds) are well established and documented. These biofuels have a positive impact on the environment – a reduction of minimum 50% GHG emissions in comparison with fossil fuels, to say the least ; on rural economies, generating more than 290.000 jobs ; and on trade balance, saving more than 10 billion euros of imports of both fossil fuels and animal feeds.

A solid analysis of facts shows that during its main development period (2000-2015), the biofuels sector, in Europe, had no negative effect neither on food availability and prices, nor on agricultural land. Without being the culprit for increasing food prices, biofuels strengthened the resilience and profitability of the EU agricultural sector and rural communities, especially in the less competitive agriculture areas, offering a stable demand and increased revenues to a struggling sector.

Moreover, these biofuels contribute to enhance global food security by allowing the development of a credible EU high-protein feed supply chain – 13 million tonnes of feeds “made in Europe” every year.

Therefore, RED II should clearly differentiate biofuels that are made from EU feedstocks and that contribute to the supply of the EU market with both feed and fuels, from other and more controversial biofuels, and secure a specific mandate for the highly sustainable crop-based biofuels (HSCB), as proposed by the Agriculture Committee of the European Parliament.

Farm Europe launches the Green Energy Platform

Today, Farm Europe launched the Green Energy Platform gathering leading companies from Germany, France, Poland, Latvia, Lithuania, Hungary and Sweden willing to reflect and promote the sustainable contribution of agriculture and related industry to the energy challenge.

The platform, mobilising key actors of the EU sourced biofuels sector, will be an active contributor to the debate on the Renewable Energy Directive tabled by the European Commission in November 2016, that will start at the European Parliament in the coming days.

” Food, Fuels & Feed:

Agriculture is energy for life”

Building on Farm Europe report showing the strategic dimension of EU Crop Based biofuels, the platform will put forward concrete proposals in order to boost the contribution of EU agriculture to the EU climate agenda in the field of energy.

A special focus will be given on biofuels from EU feedstock that not only achieve important climate benefits at the lowest carbon abatement costs in the transport sector, but also reduce the EU’s protein deficit – thus enhancing global food security -, create jobs and wealth in rural areas, and are a source of income stabilization for struggling EU farmers.

The launch of the platform was announced during an event organized in the context of the EU Sustainable Energy Week.

Contact :

Luc Vernet

Tel. : +32 2 234 56 21

Email : info@farm-europe.eu

NBTs: What are we talking about?

Today, Farm Europe organized and hosted a discussion on New Plant-Breeding Breeding Techniques. 

This event has been an opportunity to better understand the potential risks and benefits of the new plant breeding techniques, thanks to a direct discussion with well-known scientists. This debate’s aim was to shed light on the challenges in relation to the ongoing discussions around the future of plant improvements at European level and in EU Member States, in the context of the current regulatory framework.

Opening the debate, Farm Europe introduced the issue by specifying that today, the agri-food sectors are more than ever confronted with 3 major demands from our society: (1) to provide safe and quality food, (2) to keep rural areas lively and viable and (3) to optimize the good management of the environment and to fight more effectively against climate change. (A full briefing on NBTs is available here)

“Being able to answer jointly to these three challenges is for sure a challenge in itself, but a feasible one, if you accept to live in this Century, to make effective use of science and concentrate your efforts on double performance: economic performance and environmental performance” , Yves Madre stated.

Furthermore, he also underlined that “in an overall context of stagnation for EU agriculture, it is now time to reinvest in innovation and research, in genetics and to develop a concrete science-based approach in that respect”.

New breeding techniques are said to be promising as modern and faster extension of usual traditional breeding techniques. But if the aim is to develop sensible policies and orientations based on solid ground, the first question to be answered when it comes to NBTs is: What are we talking about? And precisely:

  • Scientifically, what are NBTs in simple words?
  • Economically, what are the expectations and what is already known?
  • On Environment, is there any added value?

Three high-level panelists addressed today’s issue from the scientific point of view: Dr. Eli Khayat researcher at Rahan Meristem, Professor Piero Morandini, researcher in Plant Physiology at the Department of Biology of the University of Milan and Dr. Emmanuel Guiderdoni, scientist working at the Biological Systems Department of CIRAD.

Professor Piero Morandini presented what NBTs are in relation to plant breeding, and more specifically CRISPR/Cas9 as “this technique is going to have the greatest impact on our society if we are wise enough” and it will be the most applied technique in the future. In this context, he underlined the implications to plant breeding and discussed the comparison with traditional techniques, also by giving an overview of the current regulatory framework in Europe. “With transgene-free genome-edited plant you can have the genetic change where you want and furthermore every gene conferring bad traits can be selectively knocked-out” he said.

Dr Eli Khayat, gave the perspective of a commercial breeding company. He focused on the NBTs innovations already available worldwide and on what can be expected next in terms of developments and their economic aspects. Specifically, he stressed that “not all NBTs are created equal” and that “some of them are detectable but this is not the case for all of them and so we should distinguish between different techniques according to this aspect”. Furthermore, he also stressed that “with these new techniques we have many possibilities to target genes. Of course, there are challenges in this technology but they can be easily overcome”.

 While Dr. Emmanuel Guiderdoni from CIRAD explained the impacts of NBTs from an environmental perspective, what can already be said and what can be expected. His current work focuses on the impact of these new technologies and on selecting traits which are of genetically importance. Specifically, he said that they are collaborating in breeding programs on rice, with the aim to reduce nitrogen in fields. “Crispr-Cas9 is a fantastic tool” he argued, “we can target specific improvements on a single trait”.

The three scientists agreed on one very straightforward concept: the use of some of these NBTs (notably the CRISPR-Cas9) can play a key role in allowing plant breeders to introduce in an efficient way, very precise, targeted genetic modifications, which have the capacity to fasten the selection speed.

 In other words, this translates into: low cost, ease of use and speed up of innovation processes, when compared with conventional plant-breeding techniques. Furthermore, NBTs are not only a valuable option for breeders, but these modern biotechnologies also allow to develop plant varieties that can adapt to climatic changing conditions and ensure high level of biodiversity.

Future CAP : Eastern and Central European Countries in the driving seat

V4 Group PictureFarm Europe was delighted to take part and to contribute to the reflection of the 65th Meeting of the Representatives of Chambers of Agriculture of the Visegrad 4+ group (Czech Republic, Hungary, Poland, Slovakia, Slovenia, and Croatia).

These organisations adopted a first set of common position on the most pressing topics for the future of the Common Agriculture Policy, designing key orientations to enhance both the economic and the environmental sustainability of the European farming sector.

During this meeting, Yves Madre stated:

“Today marks the beginning of a very timely and necessary work.

As a former negotiator of the CAP, I definitely know how challenging it is.

I truly believe that the dialogue you established, as the Visegrad Group, is of paramount importance to build a strong clear and promising future for a truly Common Agricultural Policy.

To work ahead of the EU agenda, to be proactive and not reactive. To propose needed and feasible evolutions of EU policies and to pursue the necessary path towards a better future for the agricultural sectors all across the EU.

This overall ambitious strategy can only be built by working together for a shared, common project. With the current level of political uncertainty in most of EU Member states, not to mention the Brexit, it is of utmost importance for economic actors and their representative bodies, to be conscious and to realise what they want for the future, to define a strategy and even more to table concrete proposals.

This is exactly our ambition at Farm Europe, and thank you to AKCR for the truly appreciated invitation to be here with you today. Thank you for being such an involved and a valuable active partner as well.

A priority is to have Central and Eastern Member states in the driving seat of the future CAP.

As correctly underlined by the Bratislava Declaration you signed last month, the strategy to be promoted should be based on three main pillars Investments, Sustainability and Resilience.

Today, the challenge is not only to be in a position to articulate this vision, the related strategy and architecture of a renewed, more effective CAP before the start of negotiations on the next financial perspectives, thus before 2018. But as well to identify and select the right tools, which are needed to make this strategy work smoothly.

Investments: this is the challenge of the EU precision & smart farming sector, but in considering a short term vision and not a 20 years time frame. An array of competitive investments should be defined by each sector, considering both the economic and environmental benefits they can bring to the society.

Sustainability: building on this evolution path, switching from a prescriptive CAP to a results-based CAP, by defining what is expected from farmers and giving them freedom of action to deliver the expected, well defined and easily measurable goals.

Resilience: direct payments remain the first vital layer. Payments that are legitimate, needed and fair. In that respect, the economic dimension should be put ahead when it comes to EU tools. Key is to build on this first layer, by devising efficient tools to manage climate and markets volatility and to increase the potential of farming sector in the context of a food chain, whose relations are today very unbalanced.

These points have been partially addressed by the on-going negotiations on the Financial Omnibus, thanks to the right, productive approach of the European Parliament strongly supported by Farm Europe.

As a whole, in one word, the key aim today is to switch from a EU policy approach, which focuses only on conservation, to policies, which are conceived and able to promote entrepreneurial approaches, where farmers are at the core of the whole process, and notably the CAP, where sustainability has to be improved, thanks to better competitiveness and increased farm profitability.

The CAP should be what it was supposed to be since the beginning: a EU policy promoting investments. Investments of the EU in its economy, growth and jobs, investments of the EU in sustainability, and investments in its farming sector which is the only one able to achieve growth and provide jobs in rural areas and capable at the same time to fight against climate change effectively. This will happen only if the next CAP is reshaped on a solid basis. Its focus should be on the concept of double performance, economic and environmental, considering farmers as entrepreneurs while not forgetting the social and territorial dimension of agriculture.

It is our common responsibility to draw the renewed CAP we need, to propose the forward-looking vision and to table concrete tools to deliver in practice.  And, of course, to convince and inspire decision-makers to act in this regard.

Indeed, we have to act now. 2018 is tomorrow and the Council wants to define the main orientations of the next CAP, whenever this CAP will be reformed and implemented (2020 or 2022).

It’s in that respect that your work, our common work at EU level with inspiring meetings as today’s one, is a key stepping stone to shape and realise our progressive strategy.”

MEPs propose a more efficient CAP starting from 2018

Faced with a timid attitude adopted by the Ministers of Agriculture, MEPs took stock of their responsibilities and decided to make the most of the possibility offered by the “Omnibus” to propose common sense adjustments to the Common Agricultural Policy. The decisive approach suggested by the report of the European Parliament’s Committee on Agriculture and Rural Development (AGRI) would give farmers, by 2018, the means to be more resilient to crises and stronger within the food chain.

Without waiting for a reform of the CAP on the basis of the still uncertain agenda, the line proposed by the report, which was adopted on May 5 by the EP’s Committee on Agriculture, would enable the 2013 reform to be completed and simplified on two key aspects: Risk management tools and Competition law. The amendments, which have been negotiated mainly by three key actors of the 2013 reform – Albert Dess (Germany), Paolo de Castro (Italy) and Michel Dantin (France) – propose the following improvements:

– Facilitate the recognition of Producer Organizations by Member States; Strengthen their role in processing, sale, transport or packaging; Enable these organisations to manage volumes among them, as well as the marketing and negotiation of contracts and the related conditions on behalf of their members: these are some of the initiatives they are requesting specifically for the “food chain”.

– In addition, they proposed not only, to reinforce the risk management component of the CAP by lowering the triggering threshold for crop or climate insurance to 20%, but also to enhance improvements in income stabilization tools. It is specified that this tool must become sectoral, should be triggered after 20% of losses, and should be able to be supported by the CAP when farmers and/or all the actors in the supply chain contribute to them, and not only in the event of a crisis.

These proposals give the possibility to enrich the range of CAP tools, while leaving Member States and farmers freedom of choice. It is now necessary that the European Parliament validates these proposals as a whole and then that it needs to ensure that they will be widely taken up during the trilogue negotiations also by the co-legislator and the Commission.

LEAD BREXIT NEGOTIATOR MICHEL BARNIER IN FARM EUROPE

IMG_4615 (1)Michel Barnier, the European Commission lead Brexit negotiator, participated today in a breakfast-debate in Farm Europe on the challenges of Brexit to the EU at large, and in particular to the EU agri-food sector.

As highlighted in Farm Europe’s report, Brexit will have a powerful impact on the EU agri-food sector, under any of the possible outcomes. That impact could be catastrophic in a no-agreement scenario.

To grasp the relevance of Brexit to the agri-food sector it is worth reminding that currently the EU 27 enjoys a large trade surplus vis-a-is the UK in excess of 20 billion euros per year.

Under a scenario where the outcome of the Brexit negotiations is favourable to a long-lasting trade relationship between the EU 27 and the UK, under a comprehensive Free Trade Agreement (FTA), the EU 27 will continue to benefit from a tariff-free access to the UK market for most of its agri-food exports.

However the EU 27 will face new and increased competition from all the other countries with which the UK will also strike Free Trade Agreements. It is indeed very likely that the UK will pursue FTAs with key world players, like the US and members of the Commonwealth, which are world-class producers of agriculture and food products.

In particular the beef, dairy and wine EU sectors would face severe headwinds from these new competitors who would benefit from the same conditions of access to the UK market as the EU 27.

The negative impact could be even stronger as the UK could become a platform for exporting products from these countries to the EU 27, benefiting from the free trade provisions of the EU 27-UK FTA. That could be case for sugar products, using the UK refining capacity on sugar cane imports, and for many other products if appropriate safeguards are not put in place. Rules of origin must be tightened to prevent a massive diversion of agri-industrial capacity from the EU to the UK on the back of access to cheaper raw materials and to the single market.

However, if the Brexit negotiations fail to produce agreement on the future trade relationship, the EU 27 would face a tariff barrier on its exports to the UK identical to what third countries face today in exporting to the EU.

The tariff level in agri-food products is substantially higher than in other sectors, and particularly high in meat and dairy products. If as expected the UK would sign new FTAs with other countries, that scenario would spell the end of EU agri-food exports to the UK on a number of key sectors and cause severe disruption of trade across the board. Not to mention the difficulties that would arise from the absence of agreement on rules and standards, and the lack of equivalency agreements, which would compound the negative effects of high tariffs.

In any case Brexit will not only bring about a 3 billion euro net cut to the CAP budget, and also the EU 27 agri-food sector will suffer from Brexit under any scenario. It is thus urgent that the Commission devises a specific set of measures to anticipate the inevitable negative impact of Brexit to the EU agri-food sector.

Resources should be mobilized from now on to promote EU 27 products in the UK and minimize the foreseeable impact of renewed competition from world players. The shape and the resources allocated to the new CAP should fully take into account the negative impact of Brexit in the sector.

The EU agri-food sector fully understands the importance of a suitable result of the Brexit negotiations for the future of the Union. But it is equally important that EU negotiators and decision-makers understand the high-stakes of Brexit for the future of farming and of a food sector that represents 15% of the EU GDP.

Forging a new ambition for the EU livestock sector

FarmEurope Beef event EPBrussels, 21st March 2017 – Today, Farm Europe organized a discussion on the “Future of the EU livestock sector – The way forward”, at the European Parliament under the patronage of Vice President Mairead McGuinness and Michel Dantin, MEP.

The European beef sector is one of the most important agri-food sectors in Europe. It is characterized by great diversity and it is at the foundation of the economic fabric of many rural areas across the European Union.

Opening the event, VP Mairead McGuinness stressed that, « with several challenges facing the sector, including the expansion of the dairy herd, increased competition in global trade, the impact of Brexit and changing consumer habits, it is important to address these challenges in order to foster a sustainable future for the EU livestock sector, and the EU beef sector in particular ».

MEP Michel Dantin added : « With discussions taking place on the future shape of CAP post-2020, it is time to set a clear and ambitious strategy supporting a European agricultural sector that integrates the specificities and needs of livestock, and in particular the EU beef sector. The first step must be the Omnibus regulation with proposals made to reinforce the farmers’ position within the food supply chain, to share the evolution of value between actors of the supply chain and allow more derogations from competition law ».

Three main concerns clearly arise from the EU beef supply chain: the ability to be a global actor, to cope with new market conditions and to respond at the same time to societal expectations (i.e. climate change and animal welfare).

Farm Europe, in presenting its recommendations and analysis, strongly highlighted that taking into account the challenges faced by the EU suckler herd, it is more than urgent to set up a EU revitalisation plan for the EU beef meat sector in order to:

  1. Encourage market segmentation and build on this strategy to create value for each beef market segment;
  2. Strengthen solidarity within the beef supply chain reinforcing producers’ position in the context of the Omnibus regulation;
  3. Enhance the capacity of the sector to invest and innovate.

The full recommendations and analysis are available here:

http://www.farm-europe.eu/travaux/forging-a-new-ambition-for-the-eus-suckler-herd/