The EC’s February positioning over the regulation on NGTs triggered contrasting reactions across European Countries and different sectors. Scientists believe they will help facing the environmental and food security challenges. Some ministers are worried on their impact on small farmers and firms.
On the other hand, the UK adopted the Precision Breeding Bill, which will allow the country to move forward in NGTs research and development, ensuring its competitive advantage on the international market.
Outside Europe, the US are expecting higher government investments on Biotechnologies, while Brazil and Indonesia approved the import and production of BH4 wheat.
In April 2023, the European Commission launched initiatives on food price fluctuations, agricultural subsidies and new regulations on the use of plant protection products. It has also launched a consultation on a new set of EU taxonomy criteria for economic activities contributing to the protection of water and marine resources, the transition to a circular economy, pollution reduction, and the protection of biodiversity and ecosystems.
EU institutions have also adopted measures to tackle deforestation, promote the bioeconomy and preserve honey production.
Finally, the European Regions Research and Innovation Network (ERRIN) and the European Commission have launched the Soil Mission Manifesto, which aims to protect soil health in Europe. The manifesto underlines the urgent need for action to remedy the degraded state of 60% of the European Union’s soils.
The draft Protocol proposed by the European Commission doesn’t provide answer to the actual environment and climate concerns on the Mercosur deal, and much less in attempting to establish a level playing field for EU farmers. Vague political declarations seem to be what’s on the table. Will they suffice to convince the European Parliament and the Council?
The European Commission is known to be seeking an additional Protocol with Mercosur that would accommodate the European Parliament and Council concerns on the lack of strong environmental and climate provisions in the deal. Without further assurances the political process of ratifying the deal was actually frozen.
A leaked draft of that Protocol, labelled “EU-Mercosur Joint Instrument”, sheds light on the approach being followed by the Commission.
The draft consists on a recollection of previous international commitments of all parties; it lists a set of general good intentions with regard to the environment and to fighting climate change; it sets a single new non-binding target on the reduction of deforestation (-50% by 2025), without any proper independent verification process; and, last but not least, it lacks any enforcement mechanisms whatsoever.
What would be the real value of this Protocol? What is the added value in recalling international commitments? To which extent, if any, would that add to the existing commitments? What are general good intentions worth, without targets, and without any enforcement provisions? Even on the well-known problem of deforestation, what does the draft Protocol add to the provisions of the recently adopted EU Regulation on imported deforestation? Does an aspirational, non-binding target assuage widespread concerns on the preservation of the Amazon? If there are no enforcement mechanisms, to which extent are the good intentions and declarations more than empty words?
It is crucial however to put the current on-going negotiations on the additional Protocol in the right context.
The negotiated EU-Mercosur deal between the Commission and the Mercosur countries was already seen as too weak on environmental and climate protection. Since then the Commission has embarked in a set of proposals – the Green Deal – that are piling up new restrictions and obligations on EU farmers: the SUR proposal to reduce by 50% the use of chemical pesticides; the IED, Directive on industrial emissions, encompassing a large part of the EU livestock production; the proposals on mandatory reductions on chemical fertilisers, and on setting aside land for biodiversity; the additional efforts asked to the agricultural sector to reduce GHG emissions.
Does the draft Protocol address any of the new environmental and climate measures proposed? Does it attempt to set-up real “mirror clauses” on imports from Mercosur?
We see none of it. The application of the deal would thus lead to increased unfair competition for EU farmers. They would face higher costs, lower profitability, as a result of the Commission Green Deal proposals, that their Mercosur competitors would not. The situation today is worse for the EU agriculture sector than when the negotiation was finalised in 2019, but the draft Protocol bluntly ignores that fact.
Inevitably, if that were to be the case, imports from the Mercosur would further increase with regard to earlier forecasts. EU agriculture production would decrease, and EU consumption would be satisfied by more imports produced under much lower environmental and climate standards. EU farmers would be worse-off with no world climate benefit.
This draft Protocol doesn’t provide answer to the actual environment and climate concerns on the deal, and much less in attempting to establish a level playing field for EU farmers. Vague political declarations seem to be what’s on the table.
Will they suffice to convince the European Parliament and the Council?
The first couple of months of 2023 had to face the consequences of the on-going invasion of Ukraine by Russia, the energy crisis and the inflation rate which heavily affected prices further leveraging the consumers’ purchasing power.
In this context, the issues of pesticides, European sovereignty over fertilisers and the European Union’s protein strategy are being increasingly debated, particularly in the European Parliament. The repercussions of the war in Ukraine for European farmers in the countries bordering Ukraine require both urgent responses and the structuring of sectors, and therefore investments that are cruelly lacking in these Member States.
The EC’s February positioning over the regulation on NGTs triggered contrasting reactions across European Countries and different sectors. Scientists believe they will help facing the environmental and food security challenges. Some ministers are worried on their impact on small farmers and firms.
On the other hand, the UK adopted the Precision Breeding Bill, which will allow the country to move forward in NGTs research and development, ensuring its competitive advantage on the international market.
Outside Europe, the US are expecting higher government investments on Biotechnologies, while Brazil and Indonesia approved the import and production of BH4 wheat.
A final agreement was reached on March 30th between the European Parliament and Council on the Renewable Energy Directive’s revision. This agreement confirms the strategic importance of agricultural biomass in delivering the EU’s climate ambition alongside other renewables. It represents stability for crop-based biofuels, which are currently the main contributors to transport decarbonisation, together with a higher overall level of ambition. Unfortunately, these welcomed moves on up-ward climate objectives will be tempered by “paper-only decarbonisation” due to multipliers added by the co-legislator in favour of electro-mobility, which is the main weakness of the agreement.
The EU renewable energy consumption target was raised to 42.5% by 2030 with an additional 2.5% “aspirational” non-binding ambition. A “supplement” that will not be reflected directly in States’ objectives and that will be discussed at a later stage in a technical trilogue.
The transport sector in each Member State must reduce its GHG by 14.5% in 2030 or achieve a 29% renewable energy intensity.
RED3 also provides for 2030 a target of 5.5% combining green hydrogen and advanced biofuels consumed by the transport sector. 1% of this target must come from green hydrogen – or, more precisely, renewable fuels of non-biological origin (RFNBO), with some flexibilities for Member States with high low carbon electricity (nuclear) levels. Negotiations have long stalled on the issue of low-carbon hydrogen.
The final deal confirms a certain level of flexibility for Member States on the Annex IX Part B 1.7% cap conditional to the Commission’s prior approval, which will be very important to avoid unsustainable development of Used Cooking Oil imports currently lacking traceability and controls. A Delegated Act could increase the cap if the Commission deems it necessary and finds there is enough available feedstock to do so, which will most probably be discussed in the context of the revision of Annex IX.
Regarding the high iLUC definition, the European Parliament missed its ambition to include soy in the high iLUC definition alongside palm due to the fierce opposition from the European Commission based on WTO concerns. The EP did neither obtain a data revision every three years as foreseen earlier in the negotiation. Moreover, the European Commission will update the related Delegated Act “based on objective and scientific criteria, taking into consideration the Union’s climate targets and commitments, and proposing a new threshold where necessary based on the results of its review.” Further, the Commission should assess the possibility of designing an accelerated trajectory to phase out the contribution of such fuels to renewable energy targets so that the amount of greenhouse gas savings are maximised.”
The text maintains all the multipliers for electricity, aviation and maritime. Nevertheless, the fuel comparator, which further boosts “paper results” on the decarbonisation of e-mobility, might only be kept until 2030, and a new fuel comparator closer to actual fuel use in transport, still to be specified, should follow.
Concerning the database, the EP amendment on public information on origin has been adopted in the text, which will be most welcome as soon as the European Commission sets up a practical database well integrated with national digital information tools.
On wastes of non-feed or food origin, the GHG calculation remains as in RED2, i.e. their GHG emissions are considered at zero.
To conclude, the text maintains NUTS2 values. Annexes V and VI will be adapted accordingly considering that this option will remain as in RED2, complementary to actual values calculated at the farm level according to ESCA rules (Annex V).
The Russian unlawful attack on Ukraine in February 2022 and the following blockade of Ukrainian ports have severely affected global grain supply chains. With Ukraine being a major world exporter of corn, wheat, sunflower and barley, it was imperative for the international community to find solutions to get Ukrainian production out of the country in order to ensure global food security.The responses to this issue consisted in the set up of “solidarity lines” by the European Union in May 2022, followed by the implementation of the” Black Sea Grain Initiative” in July after an agreement between Ukraine, Russia and Turkey under the supervision of the United Nations. More than one year after the breaking of the war, this paper aims to evaluate the efficiency of these mechanisms, and to take stock of the dynamics of the Ukrainian grain market.
The European solidarity lanes
In response to Russia’s maritime blockade on Ukrainian ports, the EU mobilised in May 2022 the so-called “solidarity lanes”. The aim was to facilitate the export of Ukraine’s agricultural products to compensate as much as possible for the loss of sea routes.
In practice, it consisted in the search for other ways to export Ukraine’s agricultural products via alternative land routes and EU ports, and the set-up of better transport connections, faster customs operation and new storage on EU territory. Since its first exports, the solidarity lanes have been able to unblock around 29 million metric tonnes of grain to be exported in the EU by road, rail or vessels using the Danube delta.
In the framework of the solidarity lanes, the EU market has opened to Ukrainian imports, resulting in an unprecedented flow of Ukrainians products to eastern Europe. This sudden and significant influx has created tension locally, as large quantities of grain flown in areas with limited storage capacities (compared to the new needs) and high logistic challenges to be overcome to export them while at the same time storing and transporting local productions. Confronted with this issue that affects the Member States differently in the single market, and having assessed the pressure on local prices from these tensions in the logistical chains from the increased transit of products from Ukraine, the Commission has proposed on 20 March an aid package of €56,3 million for farmers in the most affected countries by a drop of local market prices (Poland, Bulgaria, Romania). The payment is expected by 30 September 2023.
The Black Sea Grain Initiative
The Black Sea Grain Initiative is a mechanism implemented by Turkey, Russia and Ukraine under the United Nations supervision to create a grain corridor in the Black Sea. Signed on 27 July 2022, it allows ships to transport grain from three key Ukrainian ports – Odesa, Chernomorsk and Yuzhny – across the Black Sea after an inspection of the Joint Coordination Centre, a body created in the framework of the agreement. Before its entry into force, it was estimated that 22 million tons of grain were stuck in the Ukrainian ports due to the war.
Originally scheduled to run until November 2022, the agreement was first extended for 120 days before a second extension was announced on 18 March 2023. While the original agreement was supposed to extend the Initiative for another 120 days, Russia unilaterally decided to reduce this period to 60 days, warning that any further extension beyond mid-May would depend on the removal of some Western sanctions.
From its launch to 15 March 2023, the Black Sea Grain Initiative has resulted in the delivery of 927 vessels. Altogether, 45 different countries received over 24 million metric tonnes of grain and foodstuffs through this channel. The detailed country-by-country data can be found in the following table.
Destination country
N° of vessels received
Quantity of grain exported (thousands of metric tonnes)
Turkey
205
2700
Spain
150
4300
China
105
5400
Italy
99
1800
The Netherlands
39
1500
Egypt
39
842
Greece
26
156
Tunisia
25
560
Libya
22
451
Israel
22
679
Romania
17
285
Portugal
17
577
India
14
412
France
13
273
Bangladesh
12
655
Belgium
11
519
United Kingdom
9
197
Lebanon
8
71
Germany
8
354
Ethiopia
8
203
Algeria
8
182
Kenya
7
327
Bulgaria
7
69
Yemen
6
206
Republic of Korea
6
326
Indonesia
6
341
Afghanistan
6
131
Saudi Arabia
4
184
Oman
3
86
Marocco
3
36
Viet Nam
2
117
UAE
2
65
Sri Lanka
2
104
Somalia
2
54
Ireland
2
60
Iran
2
126
Djibouti
2
7
Thailand
1
68
Sudan
1
65
Pakistan
1
62
Malaysia
1
4
Jordan
1
5
Japan
1
56
Iraq
1
33
Georgia
1
6
Total EU countries
389
9 893
Total
927
24 654
Many third countries have a considerable reliance on Ukrainian grain. 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%).
Ukraine also accounted for half of the supply of the United Nations World Food Programme before the war.
Share of grain exported in the framework of the Black Sea Grain Initiative (mid-March 2023)
In terms of exported cereals, maize accounts for almost half of the exports. This cereal has always been usually mostly exported to China and the EU (for example, it represented 62% of the maize exported shares in 2021 (USDA)). This explains the weight of these two blocs in the total export share.
Wheat constitutes a quarter of the exported volume. It is usually exported to developing countries (notably Egypt, Indonesia and Bangladesh). Since the launching of the Black Sea Grain Initiative, two-thirds of the wheat was destined for developing countries, for which it is the most important and most needed food staple, representing 18.1% of the total shipments of the Black Sea Grains Initiative. Furthermore, it allowed the United Nations World Food Programme to restart shipping from Ukrainian ports, and more than 450 000 tonnes of wheat have been shipped to Ethiopia, Yemen, Djibouti, Somalia and Afghanistan.
Data shows that the addition of the implementation of the Black Sea Grain Initiative and of the solidarity lanes initiative has effectively allowed Ukraine’s wheat and corn exports to recover.
Both are necessary to export quantities that are required to answer to world market demand.
Estimate of the next harvest for 2023-2024
In 2021, the total land sown in spring amounted to 17 million hectares of crops in Ukraine. These pre-war sowings resulted in decent crops in 2022 despite the difficult conditions and loss of land. In contrast, in 2022 around 4 million hectares remained unplanted due to two main factors:
Losses of cultivable area due to the occupied territories or the fact that some land is too damaged by hostilities to be cultivated, or too dangerous
Poor profitability for producers: the efforts to facilitate the transportation of exports have resulted in higher costs. Exports by truck, rail or barge from the west are expensive, while long inspection times and associated demurrage charges have added significant costs to shipments through Black Sea ports. These costs have been largely absorbed by Ukrainian producers in the form of lower prices. Furthermore, the prices of input have risen, further reducing producers’ profit margins and discouraging them from planting for the coming year.
In result, Ukraine’s grain harvest could decline by 35-40 million tons in 2023, including 12-15 million tons of wheat and 15-17 million tons of corn, according to the Ukrainian Agribusiness Club.
For comparison purposes, the following graph shows Ukrainian maize, wheat and barley production over the last 10 years.
In the future, wheat supplies for 2023/24 (composed of the year production and the stocks from the 2022/23 marketing year) are likely to be almost 30% below 2022/23 levels and 45% below 2021/22 level.
Note that the 2021/22 harvest was an exceptional production year.
Concerning maize, the expected supplies for Ukraine for 2023/24 could be 36% below 2022/23 level and 53% below 2021/22 level.
The issue of storage
During summer 2022, the Ukrainian storage abilities were questioned, as the grain was accumulating and could not be delivered abroad. This issue has strongly decreased since the Black Sea Grain Initiative: actually, the high grain stocks allowed exports estimates to grow while production dropped.
Before the invasion, Ukraine was exporting nearly 80% of its corn crop annually, preventing large year-end stocks. The Russian blockade has forced Ukraine to stockpile: the USDA’s estimate for the 2022-23 corn ending stocks in Ukraine amounts to 6,9 million tonnes, up from 5,1 million the previous year. This is well above the norm, which averages 1,3 million tons. In addition, the stock-to-use for the year is estimated at 27%, compared to 4% before the war.
Concerning wheat, the USDA’s estimate for the 2022-23 wheat ending stocks in Ukraine amounts to 4,2 million tonnes, down from 6,8 million the previous years. Here again, the stock-to-use is well above the average of previous years.
Conclusion
The mechanisms set by the European Union and the United Nations have served their purpose in allowing the export of more than 54 millions tonnes of Ukrainian grain. However, the future of the Black Sea Grain Initiative – which has resulted in the export of 25 millions tonnes since August – is conditional on the goodwill of a Russia determined to use it as a leverage to negotiate an easing of Western sanctions toward it.
Moreover, the disturbances created by the war are not limited to the Russian blockade. The harvest of 2022 benefited from the pre-war sowings and was therefore moderately affected by the events, but it will not be the same for future crops. The important stock gathered in 2022 mitigated the gap in the 2022/23 campaign as well.
However, due to the direct and indirect effects of the war, production is expected todecline by35 to 40 million tons in 2023, with shortfalls of 12 to 15 million tons of wheat and of 15 to 17 million tons of corn. The important stock gathered in 2022 mitigated the gap in the 2022/23 campaign, but in 2023/24 the fall of the production will inevitably affect the international market.
Lastly, with regard to the impact of the Ukrainian products on Eastern European markets, the recently proposed aid package by the Commission may alleviate the pressure for the local farmers. However, the encountered difficulties will remain in these countries, as they are symptomatic of a lack of investment in their infrastructures. It will therefore be crucial for them to be able to invest more in their storage capacities and in the performance of their supply lines on top of the already existing challenge of those countries to develop new outlets for their cereals in their own country, notably based on bio and circular economy.
While the EU is waiting for the European Commission to publish its proposal on the legal framework for new genomic techniques (NGTs) next June 7, in the UK last March 23 the Genetic Technology (Precision Breeding) Act was passed after a process of about a year.
Precision breeding involves using technologies such as gene editing to adapt the genetic code of organisms-creating beneficial traits in plants that, through traditional breeding, would take decades to achieve.
The Act emphasizes how these techniques will increase the sustainability of agriculture in the UK, for example, with drought- and disease-resistant crops, reduce the use of fertilizers and pesticides, and help to breed animals protected from contracting harmful diseases.
Under the provisions of this Act, a new simplified, science-based regulatory system will be introduced to facilitate research and innovation in precision breeding, while stricter regulations for genetically modified organisms (GMOs) will remain in place.
Unlike the European Commission’s intention, which is to limit its proposal to cisgenesis and targeted mutagenesis only for plants, the UK Genetic Technology (Precision Breeding) Act covers both plants and precision-bred animals developed through techniques such as gene editing. The key element emphasized by the law is that, unlike GMOs, these techniques produce genetic changes that could have occurred through traditional breeding or that occur naturally.
The law passed is not the end of the process. The law itself provides a framework for more detailed implementing rules that will be introduced through secondary legislation in the coming months, to ensure measures that are proportionate to the scientific evidence of risk and similar to those currently applied to conventionally bred plant varieties.
The law includes the following elements :
– Exclude plants and animals produced through precision breeding technologies from the GMO (Genetically Modified Organisms) legislation.
-Introduce two reporting systems: one for precision organisms used for research purposes and the other for commercialization. The information collected will be published on a public register.
-Establish a proportionate regulatory system for precision-bred animals to ensure that animal welfare is safeguarded.
-Establish a new science-based approval process for food and feed derived from the use of precision-bred plants and animals.
At this stage (March 2023), the UK FSA (*) doesn’t “envisage that additional traceability requirement beyond those in General Food Law will be necessary. However, further work will be undertaken as we develop policy to understand the trade and enforcement aspects, including how the Windsor Framework and UKIMA will operate in practical terms.
The Bill provides as well discretionary power for ministers to make regulations to require the FSA to establish and maintain a public register of information relating to precision-bred organisms (PBOs) authorized for use as food/feed in England. FSA underlines that a register could include, for example, information about the type and nature of the authorized PBO, any unique reference/identifier it has been given, links to the published scientific risk assessment, legislation by which the product has been authorized, etc. FSA’s consumer research indicates that consumers supported the idea of a register of PBOs.
The school schemes for food procurement are a European initiative whose aim is to improve the quality and the variety of nutritional intake for children in school age. They represent one branch of the preventive arm of the more general approach of the EU in its health policies by educating the next generation to healthy and balanced diets, the care of the self, and to the cultural value of food. Or, at least, they could.
Today the the COMAGRI Committee voted on the INI report on the European Milk and School Fruit and Vegetables Programmes.
Farm Europe welcomes the position taken by COMAGRI to focus on the issues of increasing awareness and education, making the scheme available to more children, addressing the issue of allergies, and maintaining support for traditional foods, including milk and dairy products, rather than imitations.
As analysed by Farm Europe, in order to improve the implementation and efficacy of the programs, the following actions should be taken :
Improve inclusiveness: the programs can only be effective if they reach out to a maximum of children enrolled in schools. At the end of the day, the aim of the programs in this sense should be to include 100% of children who attend school for educational course and for the additional activities (cooking classes, farm visits, food tasting, etc.). Furthermore, free procurement of F&V, milk and dairy to children coming from weak socio-economic situation (two firsts’ quintiles) should be considered, as the current schemes allow MS to decide whether families should partly compensate for the costs.
A truly effective coordination amongst the actors involved in the programs (schools, families, State, producers and other actors of the food supply chain) shall be implemented to effectively assure coherence and facilitate exchanges within the organisation of both the procurement and the educational measures.
Even the financing amongst states: funds should be re-calibrated based on the actual nutritional needs of pupils in member states, considering as well the socio-economic background and focus their action where most needed.
Give more importance toeducational -accompanying- measures: it is indeed necessary to dedicate more efforts to the educational measures, within the framework of informing pupils about diets and lifestyle that should be balanced, and include the balanced use of different raw, or minimally processed, ingredients during cooking. This approach, with increased educational training, might also target and reduce the plague of food waste in school canteens, which is estimated to be around 19,3Kg per student per school year.
Consider holistic approach:
To focus on all children at school, from elementary schools (and pre-schools) to 15 years old.
To include in the financing of the program activities that cover cooking classes, multidisciplinary courses on nutrition (link to biology, seasonality, philosophy, medicine, art, etc.).
To give more concrete support to the actors ‘on the field’, responsible for the actual implementation of these programs (teachers, canteen personnel, chefs, dieticians, etc.).
To accompany communication campaigns all along the school year, nudging students towards reconfirmation and strengthening of the messages learnt during class hours.
To ban ultra-processed foods and competitive food from school environments and to focus on natural and traditionnal foods, including in order to answer adequately to the problem of allergens and to refuse any attempt to include imitation or synthetic food.
To incentive the development of tasty foods offered in canteens: the nutritionally balanced meal should be kept as the priority of public procurement, but taste and pleasure are just as fundamental parts of eating as food.
To reduce national administration burdens for educational institutes, providers of food, local administrations, notably by strengthening their digitalisation.
To cover the totality of local ingredients and products during cooking classes, tasting activities, canteen menus.
To provide a mechanism that allows schools to receive fruit and vegetables from local farmers (and, in general, local supply chain) in the closest proximity. Moreover, it is necessary to develop a close relationship between local farmers, who represent an important resource also in terms of knowledge for the area, and the children, who are the citizens of the future, together with actors of local food supply chains.
Lastly, the issue of funding will have to be tackled if the aim is to have efficient procurement programmes delivering truly. EU financing support should be defined as to be a true lever of mobilisation of national support (public and/or private) to reach an overall budget of € 2.7 billions per year benefiting all the 67 million of European children.
The CJEU’s decision on excluding specific in-vitro from the OGM regulation sparked contrasting reactions from multiple associations. The eight-year-long debate’s verdict comes as the EC works to define specific rules on NGTs, fueling the debate amongst NGOs.
Outside the UE, the US are expecting higher investments on the NTGs studies to boost up their competitivity, while Asia, Africa, and Latin America are starting to authorize the commercialization of GM products.
