Unprecedented crisis call for unprecedented reaction at European level

For almost three years now (since the beginning of the Covid crisis), European agriculture has been dealing with one challenge after another and one crisis after yet another one. The cumulative consequences of these challenges continue and, even increase, when they are not anymore at the headlines. And this will be a serious threat on European agriculture – and on global food security – for the months to come.

During the Covid pandemic, farmers organised themselves to ensure a supply of quality, quantity in time to all Europeans as well as to third-party markets. In order to bounce back from the market closure linked to this period, the European Commission had proposed to include a €20 billion package for agriculture within its European recovery plan. But the Heads of State and Government finally decided on a narrow envelope, reduced by more than half of the initial amount (8 billion). This reduced package gave a fairly large flexibility of use for the Member States. In fact, a very small fraction have been used to finance recovery investments. 

Nonetheless, the economic effects of the health crisis have persisted for economic actors with increased costs of inputs and intermediate consumption under the dual effect of a recovery in world consumption and bottlenecks among suppliers, primarily in Asia. This increase in production costs was only very partially passed on to the downstream sector. It weakened the margins of the agricultural sectors and farmers. 

From autumn 2021, the worsening of the situation between Russia and Ukraine created tensions over energy prices. It turned into a deep crisis with Russia’s aggression against Ukraine. The blockade of Ukrainian ports and fears about food security led to price spikes for agricultural products. These increases in agricultural prices were only marginally passed on to farmers, as the majority of field crop production had already been sold or contracted out beforehand. Traders were the main beneficiaries. When it comes to livestock production, the rise in food prices annihilated any potential positive effect of price increases. 

Today, agricultural prices are tending towards the pre-invasion levels of Ukraine. However, input prices, especially for fertilisers, remain extremely high, linked to uncertainties on the gas market. Neither these, nor the announcement of the closure of fertiliser plants in Europe, point to an easing of the situation. While the drop in global agricultural prices may divert the spotlight from the fundamentals of agricultural markets, the fear of an EU agriculture struggling against the consequences of such a price squeeze is real.  

In order to limit the impact of the Ukrainian crisis on European agricultural production, the European Union has allowed Member States to act in a scattered manner, depending on their ability to mobilise national budgetary resources. 9 Member States have submitted state aid measures for their agriculture since April 2022 (Germany, Poland, Italy, France, Estonia, Czech Republic, Slovenia, Austria, Bulgaria) with important gaps in the level of support generating frictions on the internal market. 

These measures, for those who have been able to benefit from them, are likely to alleviate some of the current difficulties, but they do not anticipate the scenario that is taking shape of falling market prices and production costs remaining at their peak. 

At the same time, the European Union has experienced one of the worst droughts. 14 of the 27 Member States were severely affected (Portugal, Italy, Spain, France, Ireland, Belgium, Luxembourg, Czech Republic, Slovakia and Croatia). Apart from rapeseed production, other crops are down, making farm accounts even more fragile. As for fodder production, it is in a very worrying state and is threatening the survival of many farmers. Already struggling with the rise in feed prices and other production factors due to the war in Ukraine, they are now faced with a need for fodder that they may have great difficulty in meeting by the autumn. Under such conditions, decisions to decapitalise are to be anticipated, with the corollary of an imbalance between supply and demand that could lead to a reversal of prices and a downward spiral.

Source: JRC, European Commission

When it comes to production in 2022/23, no sector seems to be immune to declining turnover & rising production costs; neither the animal nor the plant sectors. In fact, it is in the coming weeks that the ability of European agriculture to ensure the smooth functioning of the markets (European and for its share of responsibility for the supply of world markets) for the next 18 months will be at stake. The decisions to pay CAP aid in advance are a one-off cash flow aid, but will not be enough to break the spiral. Faced with a situation such as the present one, the maintenance of the European productive potential and of farmers at the forefront of our food security necessarily requires reductions in charges and financial aid (from fresh funds) to be decided and implemented urgently.

The Parliament and Commission return after the summerbreak must be the time for action, action for a Europe standing by its farmers.

Ukraine: assessment of the UN Black Sea Grain Initiative & EU Solidarity Lanes

The disruption of exports, specially of grain, as a consequence of the outbreak of the Ukrainian war in February 2022 triggered by Russia, severely affected global supply chains. In response, both the European Union and the United Nations organized a series of initiatives to ensure global food security, in fear that increasing figures of hunger and famine would spread worldwide. One month after the agreement to unblock Ukrainian ports, overview of the situation.

Since the ports in Ukraine had been blocked by Russian forces, the EU mobilized its Solidarity Lanes in search for other ways to export Ukraine’s agricultural products via alternative land routes and EU ports. These Solidarity Lanes have been able to unblock 2.8 million tons of grain in July, 2.5 in June, 2 in May and 1.3 in April (a total of around 8.6 million tons of grain). However, according to the last meeting held between the agriculture and transport committees in the European Parliament on July 11th, the initiative had failed to reach third countries.

Targeting third countries that have a considerable reliance on Ukrainian grain, constituted an important milestone for the EU Solidarity Lanes. Indeed, the countries that have been found to have the highest dependency on Ukrainian and Russian wheat imports, and therefore to be the most vulnerable to these market disruptions, are Somalia (100%), Benin (100%), Laos (94%), Egypt (82%), Sudan (75%), DR Congo (69%), Senegal (66%) and Tanzania (64%). As reported on July 11th, only 138,000 tonnes of wheat had been exported through Romania and Poland, which called for additional urgent measures.

The UN confronted this challenge initiating its Black Sea Grain Initiative, in coordination with representatives from Turkey, Russia and Ukraine. The first vessel that was able to leave Ukraine after months of blockade under this deal was the Razoni, on August 1st, 2022, carrying a total of 26,537 tons of corn. After that, many more followed under the authorization of the Joint Coordination Centre (JCC), established under the Black Sea Grain Initiative on July 27th, 2022.

Departure, PortDestinationNameCerealQuantity (in Metric Tonnes)
August 1st, OdesaTurkey/EgyptRazoniCorn26,537
August 5th, ChornomorskTeesport, UKRojenCorn13,041
August 5th, OdesaRingaskiddy, IrelandNavistarCorn33,000
August 5th, ChornomorskKarasu, TurkeyPolarnetCorn12,000
August 8th, PivdennyiRavenna, ItalySacuraSoybeans11,000
August 8th, ChornomorskIskenderun, TurkeyArizonaCorn48,459
August 9th, ChornomorskRepublic of Korea/SingaporeOcean LionCorn64,720
August 9th, ChornomorskIstanbul, TurkeyRahmi YagciSunflower meal 5,300
August 12th, PivdennyiBandar Imam Khomeini, IranStar LauraCorn60,150
August 12th, ChornomorskIstanbul/Tekirdag, TurkeySormovskiy 121Wheat3,050
August 13th, ChornomorskIskenderun, TurkeyFulmar SCorn12,000
August 13th, ChornomorskTekirdag, TurkeyThoeSunflower seeds2,914
August 16th, ChornomorskConstanza, RomaniaPropusWheat9,111
August 16th, PivdennyiDjibouti to EthiopiaBrave CommanderWheat23,000
August 16th, ChornomorskMersin or Iskenderun, TurkeyOsprey SCorn11,500
August 16th, ChornomorskKarasu, TurkeyRamusWheat6,161
August 16th, PivdennyiIncheon, Republic of KoreaBonitaCorn60,000
August 17th, ChornomorskAmsterdam, The NetherlandsPetrel SSunflower meal18,500
August 17th, OdesaIstanbul, TurkeySaraCorn8,000
August 17th, OdesaGubre, TurkeyEfeSunflower oil7,250
August 18th, ChornomorskIstanbul, TurkeyI MariaCorn27,982
August 20th, ChornomorskVenice, ItalyZumrut AnaSunflower oil6,300
August 20th, ChornomorskMarmara, TurkeyOcean SWheat25,000
August 21st, ChornomorskKunsan, South KoreaDa LiangSugar beet14,000
August 21st, OdesaTurkeyKubrosli YWheat10,000
August 21st, ChornomorskAliaga, TurkeyFilyozVegetable oil5,000
August 21st, PivdennyiMersin, TurkeyFoyleVegetable oil4,300
August 22nd, ChornomorskEgyptGreat ArsenalWheat25,500
August 22nd, ChornomorskGreeceMarantaCorn5,300
August 23rd, ChornomorskTurkeyKafkam EtlerCorn2,437
August 24th, OdesaLibyaGanosayaCorn16,500
August 24th, OdesaRotterdam, The NetherlandsZhe Hai 505Rapeseed29,600
August 25th, PivdennyiGermanyAscaniosCorn58,510
August 25th, OdesaIsraelMohamad YWheat11,000
August 25th, OdesaHaifa, IsraelBellisSoybeans6,000
August 26th, PivdennyiTekirdag, TurkeyOris SofiSunflower oil5,900
August 26th, ChornomorskMersin, TurkeyZelek StarPeas3,700
August 26th, ChornomorskPort Sudan, SudanSeaeagle  Wheat65,340
August 26th, ChornomorskEl Dekheila, EgyptPretty LadyCorn45,000
August 26th, ChornomorskCochin, IndiaAvivaSunflower oil19,100

Unblocking Ukrainian exports by sea was key to release the more than 20 million tons of grain (around 6.6 million tons of wheat, 13.6 million tons of corn and 400,000 tons of barley) that had been trapped in Ukraine´s ports, with a value of around $10bn.

The current situation indicates that the Black Sea Grain initiative has already exported a total of 1,3 million tons of grain and foodstuffs from the ports of Odesa, Chornomorsk and Pivdennyi. Therefore, since the start of the UN and EU initiatives, an accumulated total of around 10 million tons of cereals and oilseeds have been exported – which represents approximately half of the grains blocked at the start of the war.

The production of the new season is expected to decrease in Ukraine, affected by the loss of land due to the war and a 40% reduction in yields due to the lack of availability and access to agricultural inputs which will affect global food security. The Ukrainian Grain Growers Association (UGA) consider that the production of the 22/23 harvest season will stay at around 66.5 million tons of grain and oilseeds (compared to 84.6 million tons for the 21/22 season) while the USDA estimated around 52.2 million tons will be produced (25 million tons of corn, 21.5 million tons of wheat, and 5.7 million tons of barley).

Storage and developing new logistical pathways with the new harvest coming in remain a critical issue. It is estimated that Ukrainian farmers can count on 75 million tonnes of storage capacity under normal circumstances. According to the last FAO estimates, 30% of these storage capacities were filled by grain from the last harvest, while 14% of storage facilities were not functional due to damage or destruction, and another 10% due to Russian control in invaded areas, which means that there are currently around 35 to 45 million tonnes capacities, and a remaining gap in storage capacity between 10 and 20 million tonnes, which will be only partially covered by the joint initiative launched by Japan, Canada together with the UN.

Therefore, the mobilisation of Ukrainian farmers to keep growing food, with the support of the Solidarity lanes and other international initiatives under the UN coordination to keep the agricultural sector in Ukraine operational and in a position to export at least part of its capacities, together with the efforts to step up production in the European Union – and despite the dramatic weather conditions – and the various international initiative at global scale like the FARM and Global Alliance for Food Security initiatives are in a position in the short term to mitigate the impacts of the disruption in global food systems triggered by Russia.

Nevertheless, the mobilisation in the upcoming months will be critical to overcome the food security threat to the most affected importing countries, which call for strengthening logistic and improving coordination mechanism, including for the Solidarity Lanes, keeping the effort to increase the resilience and production capacity within the European Union while stepping up structural effort in developing countries to develop their capacity to produce food locally. A special attention to agricultural input, in particular fertilisers, will be needed as the disruption in fertiliser production might undermine dramatically the next harvest.

Before the EU and UN initiatives unblocking the Ukrainian exports, 22 million tonnes of ready-to-be-exported grain were blocked. The swift release of grain from the 21/22 season still stored in Ukraine will need to continue to be handled by these initiatives in the months ahead, with strengthened logistic and coordination mechanisms to ensure effectiveness, including better channeling grains depending on its quality and managing the impact of storage under difficult conditions, storage that needs to be further enhanced by 10 to 20 million tonnes.

According to the Ukrainian government, 3 million tonnes of grain in September and 4 more in October will be exported through Ukraine’s ports. However, it is also important to consider that Ukraine might perceive fewer inbound vessels due to fear of travelling across unsecured waters and the difficulties in finding insurances or, indeed, to unexpected conflict developments.

WINE NEWS: June & July – Drought & fire

In June, both AREV and the French Winegrowers Cooperative have had their congress to discuss the next steps to take for the future of the wine industry. In the meantime, the Spanish FEV have put out a manifesto to protect rural vineyards, and OIV’s Pau Roca signalled that despite the fall in consumption of wine to the pandemic, now is the perfect time to invest in wine exports. The month concluded by the signature of the FTA between the EU and New Zealand, which is said to eliminate tariffs for wine, and at the same time protect the full list of European wines.

In July, Europe’s latest heat waves have triggered fires and caused damages to winemakers. After the dry spring, and once again record high summer temperatures, winemakers are facing wildfires across wine-growing regions in Europe, including in France, Greece, Portugal and Spain. The damages and loss of production are still being assessed, but it will certainly lead to shrinking the potential harvest and fewer resources for the next year. Nonetheless, due to the extreme drought, some producers have been granted permission to irrigate their vines, and others have started to already collect their ripe grapes.

Full note available on FE Members’ area


Developments in the debate of lab-grown meat is happening around Brussels, with the first event on the topic hosted by MEPs in the EU Parliament: while the producers, NGOs, and, it seems, the Commission to some extent support this technology, farmers and consumers are sceptic about the benefits that this product could bring to the vision of the future of food. In the meantime, the UK identified alternative proteins as a strategic field where to invest for its long-term food strategy. 

In answer to an Italian MEP, the Commission states that alternative milk products cannot be marketed as ‘milk’, but should be called in a way not to confuse consumers. On the same line, the South African authorities banned meaty names for vegetarian and vegan products.

On food labelling, the Italian competition authority expressed itself on the NutriScore, accusing the label to confuse consumers. 

full note available on FE Members’ area


While the debate on New Genomic Techniques in the EU continues, with European institutions and member states taking clearer positions on the topic – Italian MEPs pledge for the support of the revision of the legislation so to ease the application of new genomic methods for plant breeding; the Italian low Chamber stared formal discussions about the ‘genome editing’ bill; Austria is more than ever convinced to oppose any opening to NGTs -, Japan passed a bill about stricter GM labelling. 

full note available on FE Members’ area


The new Czech Presidency of the Council clearly adopted a different approach on the Farm to Fork strategy compared to previous presidencies: in light of the war in Ukraine and its consequences on the world’s food security, it intends to slow down the process of reform. At the same time, however, Health Commissioner Kyriakides presented to MS and strongly advocated for the advancement of regulations on pesticides use, getting closer to the implementation of one target of the strategy (reduction of chemical pesticides by 50% by 2030): in her presentation, she said that Integrated Pest management methods will be favored, and that pesticides should only be used as the very last resource. A report of the US agricultural department analyzed the effects that the F2F could have on the European milk sector, concluding that, if fully implemented, the milk sector will have to prepare to suffer.   

full note available on FE Members’ area