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State aid to the agricultural sector: more than €18 billion since 2021

 

🇪🇺 A three-speed Europe 🇪🇺

 

Since the start of the budget period (2021), Member States have allocated more than €18 billion in State aid to the agricultural sector, representing no less than 11% of total aid under the first pillar of the CAP – a proportion that rises to 14% when focussing solely on the 2021-2023 period.

The Netherlands has by far provided the most support to its agricultural sector, both in absolute terms and relative to direct payments or the national agricultural production value. During the period analysed, the aid amounted to 101% of the first pillar received by Dutch farmers. Denmark, Greece, Hungary, the Czech Republic, and Slovakia also granted substantial funds, ranging from 20% to 43% of their respective direct payments. For the 2021–2022 period, Spain distributed the equivalent of 28% of its first pillar. Lastly, while the total amounts distributed by Italy, France, and Germany remain significant, these countries limited their support to between 5% and 10% of their respective direct payments, a level below the European average.

On average across Europe, these State aids only partially compensated (70%) for the loss in the real value of CAP first pillar payments resulting from their lack of indexation to inflation. The situation, however, varies significantly from one Member State to another:

  • Four countries overcompensated for the decline, providing farmers with liquidity that could boost their investment capacity. The Netherlands stands out in particular, with support 8 times greater than the inflation-related decline. Poland and Spain (1.4 times), and Greece (1.3 times) follow.
  • The other countries that provided the most support for their agriculture offset the decline by between 50% and 75%.
  • Finally, it should be noted that some countries granted very little state aid to their agricultural sectors (e.g. Latvia, Estonia, Ireland, Romania, Belgium, Luxembourg, Bulgaria and Portugal).

 

 

Note:

It should be emphasised that the figure of €18 billion is a minority figure, as the available data has certain limitations:

  • Publication thresholds: Member States are only required to reference their aid above certain thresholds1 , which leads to an underestimation of the actual amounts spent.
  • The data for 2024 only include aid referenced before 8 November. As a result, the proportion of aid in relation to CAP aid is underestimated.
  • Absence of certain national data: Poland, Spain, Romania and Slovenia do not use the Commission’s database, but their own national transparency registers. Poland and Spain are among the countries that have heavily subsidised their agricultural sector through State aid. According to the State Aid Scoreboard (the European Commission’s reference tool for monitoring State aid), Spain and Poland allocated €1.97 billion and €1.88 billion respectively in State aid to their agricultural sectors over the period 2021-2022.

 

 

Contents

 

Heterogeneous aid between Member States

The amount of aid granted varies greatly between Member States. Three distinct groups can be identified.

Ten countries granted aid volumes approaching or significantly exceeding €1 billion, collectively amounting to over €15.5 billion. Looking exclusively at the aid recorded in the Commission’s database (excluding Spain and Poland), the top eight countries accounted for €11.6 billion, representing 84% of the referenced aid. Among them, the Netherlands stands out with €2.83 billion in aid, followed by Italy, France, Denmark, Germany, Greece, and Hungary, each allocating between €1 billion and €1.5 billion2. 

A second group of countries is characterised by aid packages that, while still significant, remain well below those of the first group. Slovakia, Austria, Lithuania, Sweden, Latvia, Finland, Ireland, and Croatia supported their agricultural sectors with amounts ranging from a few to several hundred million euros. Finally, a third group of countries made very limited or no use of this aid mechanism, including Bulgaria, Portugal, and Belgium.

The analysis changes when comparing State aid to the CAP’s direct payments:

  • The Netherlands provided by far the most support to its agricultural sector, both in absolute terms and relative to direct payments. Over the studied period, aid reached 101% of the first pillar.
  • Denmark, Greece, Hungary, the Czech Republic, and Slovakia also allocated very high proportions, ranging from 20% to 43% of their respective direct payments. During the 2021–2022 period, Spain and Poland each distributed the equivalent of 28% and 17% of their First Pillar payments, respectively.
  • Conversely, while the total amounts distributed by Italy, France, and Germany remain substantial, these countries limited their support to between 5% and 10% of their respective direct payments, a level below the European average.

 

Agricultural support unequally proportionate to the production value

This heterogeneity is also evident when comparing the aid provided to the agricultural production value of different countries during the 2021–2023 period.

Eight countries granted particularly high amounts in proportion to the value of their agricultural production (between 2.5% and 4.5%), including Slovakia (4.5%), followed by the Czech Republic, Hungary and Greece (3% – 3.5%). Finally, Latvia and the Netherlands are both around 2.5%.

Five states paid out slightly lower but still substantial proportions of their agricultural value (between 1 and 2%): Lithuania and Poland (2%), followed by Croatia, Estonia and Spain (1%). Among the countries with the highest agricultural turnover, Spain is the only one to have subsidised to such an extent.

Six States granted aid in more moderate proportions, between 0.5% and 1%: Austria, Italy, Finland and Sweden are slightly below 1%, while Germany and France are around 0.5%.

Finally, the last eight States allocated low to very low proportions (< 0.5%), including: Ireland, Romania and Bulgaria are around 0.3%, while Belgium, Luxembourg and Portugal allocated less than 0.1%.

 

Aid only partially offsetting the erosion of CAP payments due to inflation

In most Member States, the aid is lower than the cumulative inflation over the 2021–2023 period. At the EU level, State aid has only partially compensated for the loss in the real value of first pillar payments due to its non-indexation to inflation. Over this period, State aid covers about 70% of this decline. However, the situation varies from one Member State to another, and three categories can be distinguished among those that have provided the most support to their agriculture:

The Netherlands stands out with an entirely atypical level of State aid: the amount allocated is 7.8 times higher than the real value loss of first pillar aid.

The States that more than offset the decline :

  • Spain: had the lowest inflation in the European Union alongside France (12%). Its aids account for 142% of the decline.
  • Poland: relatively moderate inflation, around the European average (20%). Its aids account for 140% of the decline.
  • Greece: Its aids represent 133% of the decline. Along with the Netherlands, these are the only two countries to have experienced relatively moderate inflation (below the European average) but to have allocated more than 2.5% of the value of their agricultural production.

Those who only partially offset the decline:

  • Czech Republic: 91% compensation. Although second in terms of the proportion of aid in relation to agricultural value, it is one of the Member States most affected by inflation between 2021 and 2023 (32%), and its aid has not been sufficient to fully compensate for the loss in value of CAP aid.
  • Hungary: 61% compensation. Despite high levels of aid, both in absolute terms and as a proportion of its agricultural value, Hungary recorded the highest inflation rate in the European Union over the period (41%), reaching a level twice that of the European average.
  • Italy: 75% compensation.
  • France: 50% compensation.
  • Germany: 47% compensation.

France, Germany, and Italy have by far the highest agricultural values. Between 2021 and 2023, they contributed to 18% (€274 billion), 14% (€216 billion), and 13% (€207 billion) of the EU’s agricultural value, respectively. Yet these are the same three countries which, among those that supported their agriculture, allocated the least proportionally to their agricultural value and compensated the least for the decline in aid linked to inflation.

Among the other countries that paid much less aid in absolute terms, there are two groups.

Those whose aid offset some of their losses:

  • Slovakia: 95% offset. Its situation is similar to that of the Czech Republic. Slovakia is the Member State that has paid out the most aid in proportion to its agricultural value (4.5%), but it is also one of those most affected by inflation (29%). While this aid helped to compensate for losses, they were not enough to boost farmers’ investment capacity.
  • Austria: 65% compensation.
  • Finland, Croatia, Lithuania and Sweden: compensation between 40 and 45%. Croatia and Lithuania stand out for their high proportions of aid in relation to their agricultural value (around 1.5%), while Finland and Sweden, less affected by inflation, allocated more moderate proportions (around 0.7%).

Those who made little to no compensation for their losses:

  • Latvia (32% compensation) and Estonia (22%) stand out for their high levels of aid in proportion to their agricultural value, at 2.7% and 1.1% respectively. However, these two countries also suffered some of the highest inflation rates in the European Union (32% and 36% respectively).
  • Romania (16% compensation) and Bulgaria (1%): although they recorded relatively high inflation, around 30%, they paid out very little aid.
  • Ireland (18% compensation), Belgium (12%), Luxembourg (8%) and Portugal (0%). The latter countries only marginally compensated for the losses, despite relatively low inflation (around 15%).

 

Aid Categories

State aid notified as a “response to crises” largely dominates, accounting for 74% of total aid distributed by Member States.

Aid relating to COVID-19 represents the largest area of State aid expenditure in the agricultural sector. It accounts for €6 billion or 43% of total aid over the period, a higher share than all other crisis aid combined (31%). Although COVID aid will continue to be distributed in 2024, it has been decreasing since 2021, with a sharp reduction in 2023. The countries that distributed the most aid in response to COVID-19 are Denmark (€1.27bn), the Netherlands (€1.25bn), Greece (€1.10bn) and, to a lesser extent, Italy (€781 M), Germany (€431 M) and Hungary (€399 M). For the first three countries, COVID aid alone accounted for 39%, 45% and 13% of their direct aid respectively.

At the same time, aid under the TCF (Temporary Crisis Framework) accounted for €1.26 billion or 9.1% of total aid paid over the period. It approached €1 billion in 2023, a year in which it was the leading source of crisis aid, accounting for 23% of total aid. Italy (€475bn) and Hungary (€311bn) dominate in the use of the TCF framework, followed by France (€130 M) and Slovakia (€101 M). These 4 Member States alone account for 81% of this category of aid.

TCTF (Temporary Crisis and Transition Framework) aid amounts to €641 million. Starting in 2023, this aid accounts for less of the total over the period. However, although not all the aid has yet been referenced, TCTF aid appears to be the main source of aid in 2024 (33%), following on from COVID aid in previous years. Slovakia largely dominates TCTF aid, with €342 M. France (€123 M) and the Netherlands (€99 M) follow more moderately, while the rest of the Member States paid little or no aid under this heading.

Aid for the prevention, control and compensation of animal and plant diseases totals €1.1 billion and accounts for 8% of total aid, i.e. slightly less than aid under the TCF framework. The volume of aid has increased by 193% between 2021 and 2023. The livestock sector accounts for the vast majority of this aid (85%). France (€503 M) alone accounts for almost half of this aid, followed by the Czech Republic (€219 M) and Sweden (€121 M). 

Finally, aid linked to climatic or natural events amounts to €777 million. Although it remains a minority in the aid mix, it has increased by 124% between 2021 and 2023. Most of this aid went to France (€315 million), Italy (€235 million) and Hungary (€117 million), which together accounted for 86% of the total. Other countries, such as Greece and Portugal, which were also hard hit by such phenomena, did not grant this aid.

Non-crisis aid accounted for €3.6 billion or 26% of total aid. The Netherlands (€1.14 billion), Germany (€737 million) and the Czech Republic (€530 million) distributed much larger amounts than the other countries, together accounting for 66% of this type of aid. Driven by these 3 countries, non-crisis aid has increased by 77% between 2021 and 2023.

 

Supported sectors

Although the sectors benefiting from State aid are not always specified, which limits the analysis, certain features are evident.

Taking all Member States together, the livestock sector received the most aid, amounting to €5.27 billion or 38% of total aid.

In terms of absolute amounts, the countries that provided the most support for livestock farming are Denmark (1.26 Md), the Netherlands (€865 M), France (€647 M), Greece (€583 M) and, to a lesser extent, Hungary (€427 M), the Czech Republic (€386 M) and Germany (€372 M).

If we look at the proportion of each State’s total aid allocated to livestock farming, we see that Denmark (93%), Finland (84%), Sweden (67%), Estonia (63%), Ireland (54%), Lithuania (51%), Greece (47%) and France (44%) gave specific support to the sector.

Italy (75%), Austria (63%) and Hungary (44%) were more supportive of their crop production sectors.

 

Analysis of the most “generous” states

🇳🇱 Netherlands :

The Netherlands has supported its agriculture by far the most, both in absolute terms and in terms of direct aid. Over the period studied, State aid allocated exceeded direct CAP aid.

The Netherlands stands out for its strong support both outside and during crises. Non-crisis aid, linked in particular to the national agricultural transition plan, accounts for a significantly higher proportion of its aid than the rest of the Member States (40% compared with an EU average of 26%). They alone account for €1.14 billion, or 41% of the country’s direct aid, and more or almost as much as the average aid for the other Member States, all categories taken together. At the same time, the Netherlands has also massively distributed aid in response to COVID-19, to the tune of €1.25 billion. In comparison, this is equivalent to what the 7 other States that distributed large amounts of aid paid out on average, all aid taken together.

Aid was distributed relatively evenly across the different sectors.

🇮🇹 Italy:

Category: Italy paid out higher proportions than the European average

  • of COVID aid: 50% (€781 M) compared with 43%.
  • TCF aid: 31% (€475 M) compared with 9%.
  • aid linked to climatic or natural events: 15% (€235 M) compared with 8%.

Conversely, it paid no aid for the prevention, control and compensation of animal and plant diseases.

Sectors: Italy stands out for its strong support for plant production (the analysis of sub-sectors is less clear and does not reveal support focused primarily on the wine sector). This ‘focus’ on plants is all the more marked for COVID (87%) and TCF (93%) aid.

🇩🇪 Germany:

Category: Germany has distributed the majority of non-crisis aid (57%), and stands out for its lesser support during crises, compared with the other ‘big distributors’ of aid. With the exception of COVID aid, which still represents €431 M, Germany has granted relatively little crisis aid.

Sectors: the country is characterised by relatively uniform support for all sectors and by strong support for mixed farming, which accounts for 17% (€219 M) of its aid, compared with an EU average of 4%.

🇫🇷 France :

Category: the proportion and amount are lower for COVID aid (14% or €200 M), compared with the European average (43%) and with other States that distributed large amounts of aid (€764 M). Aid for the prevention, control and compensation of animal and plant diseases plays an important role: 34% (€503 M) of aid over the period. In 2023 and 2024, this aid will be the main area of expenditure. Aid linked to climatic or natural events is also higher than the European average and the other States that distributed large amounts of aid: it accounts for 22% of aid (€315 M) in the case of France. This aid was particularly high in 2022 (53% of total aid).

Sectors: Similar to its German neighbour, France is characterised by relatively homogenous support for all sectors, although the proportion of amounts for the livestock sector is slightly higher than for other sectors. Within the livestock sector, pig farms (mainly in connection with support following the COVID-19 crisis) and the poultry sector (in connection with diseases) dominate. Aid linked to climatic or natural events has been targeted at fruit trees and vines in particular.

🇩🇰 Denmark :

The case of Denmark is specific in that, although it appears to be one of the countries that has strongly supported its agriculture, this support in fact concerns almost exclusively the mink farming sector. In fact, 93% of Denmark’s aid is linked to COVID-19 and 86% to the “other animals” sub-sector. Of the aid for this sub-sector, 96% is for mink farms, following the decision to cull all mink by 2020. Apart from this aid, Danish aid is low, amounting to around €186 million, including €83 million for pig farming.

🇬🇷 Greece :

Category: COVID aid accounts for the vast majority of aid distributed by Greece: 88% of the country’s aid, totalling €1.10 billion. Greek aid will be concentrated mainly in 2021 and 2022. Greece has distributed very little other crisis aid, and virtually none linked to climatic or natural events.

Sectors: the pig sector alone receives 44% of aid (€555 M), a concentration that is even greater if we look at COVID aid alone (50%).

🇭🇺 Hungary :

Category: slightly lower proportion and amount of COVID aid (38% or €399 M), compared with the European average (43%) and with the other States that distributed large amounts of aid (€764 M). Conversely, a relatively high proportion and amount of TCF aid (30% or €311 M). In addition, alongside France and Italy, Hungary is one of the three countries which significantly allocated aid linked to climatic or natural events. In Hungary’s case, this accounted for 11% or 117 million euros.

Sectors: Hungary has provided very uniform support for the crop and livestock production sectors. It stands out in particular for its clear support for the production of cereals, pulses and oilseeds, which receives 32% (€328 M) of total aid. This homogeneity is also found within the livestock sector: 14% for poultry, 13% for pigs and 7% for dairy cows.

 

        1. ↑ AGRI and ABER State aid (Commission Regulation (EU) 2022/2472 of 14 December 2022 and AGRI State aid guidelines) : For aid granted after December 2022, the transparency obligation thresholds are EUR 10,000 for beneficiaries active in primary agricultural production and EUR 100,000 for beneficiaries active in the processing of agricultural products, the marketing of agricultural products, the forestry sector or for activities falling outside the scope of Article 42 of the Treaty. For aid granted before December 2022, the thresholds are EUR 60,000 for beneficiaries active in primary agricultural production and EUR 500,000 for beneficiaries active in the processing of agricultural products, the marketing of agricultural products, the forestry sector or for activities falling outside the scope of Article 42 of the Treaty.
          GBER (Commission Regulation (EU) No 651/2014 of 17 June 2014 as amended): the transparency thresholds since July 2023 are €10,000 for beneficiaries active in primary agricultural production, €100,000 for individual aid and €500,000 for aid involved in financial products supported by the InvestEU fund. For aid granted before July 2023, the threshold is €500,000.
        2. ↑Italy: €1.55bn; France: €1.46bn; Denmark: €1.36bn; Germany: €1.30bn; Greece: €1.25bn; Hungary: €1.04bn.

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The difference in competitiveness ranges from 19% to 39% depending on the sector, with structural factors accounting for most of the difference. To this must be added the ‘carbon’ competitiveness conferred by the natural richness of Ukraine’s soils.

At a time when the steps and conditions of accession are about to be drawn up and the pre-accession programmes defined and launched, we feel it is important that objective data can serve as a basis to define the European Union’s roadmap, without bias or avoidance.  

Ukraine & European Union: key figures for the sunflower sector

While 58% of production is carried out by structures of less than 1,000 ha, companies with more than 3,000 ha account for 17% of production. In 2023, Ukrainian production alone was greater than the entire EU’s production. As such, if Ukraine were to join the European Union, the country would become Europe’s leading producer of sunflower seeds, as well as sunflower oil.

Ukraine has been the EU’s leading supplier of sunflower oil for around ten years now. The opening up of the European market to Ukraine has had no significant impact on the flow of sunflower oil from the country.

 

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Impact of EU enlargement to Ukraine on the rapeseed sector

As part of the process of enlarging the European Union to include Ukraine, Farm Europe has analysed both the weight and comparative competitiveness of Ukraine’s main crop sectors compared to those of the European Union. 

The difference in competitiveness ranges from 19% to 39% depending on the sector, with structural factors accounting for most of the difference. To this must be added the ‘carbon’ competitiveness conferred by the natural richness of Ukraine’s soils.

At a time when the steps and conditions of accession are about to be drawn up and the pre-accession programmes defined and launched, we feel it is important that objective data can serve as a basis to define the European Union’s roadmap, without bias or avoidance.

Ukraine & European Union: key figures for the rapeseed sector

Farms of less than 1,000 ha account for 73% of rapeseed production, but oil production is dominated by 5 companies which accounted for 92% in 2021.

In 2020, the cost of rapeseed production in Ukraine was, on average, 1.5 times lower than in France.

Compared to the 2018-2021 average, Ukrainian production of rapeseed and rapeseed oil has risen by 57% and 174% respectively. Similarly, exports grew by 37% and 170% respectively. If Ukraine were to join the European Union, it would become the leading rapeseed producer in the EU, accounting for 24% of seed production and 4% of oil and meal production.

The EU was already the largest importer of Ukrainian rapeseed products before the war.

However,  imports of rapeseed have increased, and the EU now receives 93% of Ukraine’s rapeseed exports, compared to 83% in 2020/21.

 

Impact of EU enlargement to Ukraine on the cereal sector

As part of the process of enlarging the European Union to include Ukraine, Farm Europe has analysed both the weight and comparative competitiveness of Ukraine’s main crop sectors compared to those of the European Union. 

The difference in competitiveness ranges from 19% to 39% depending on the sector, with structural factors accounting for most of the difference. To this must be added the ‘carbon’ competitiveness conferred by the natural richness of Ukraine’s soils.

At a time when the steps and conditions of accession are about to be drawn up and the pre-accession programmes defined and launched, we feel it is important that objective data can serve as a basis to define the European Union’s roadmap, without bias or avoidance.

Ukraine & European Union: key figures for the cereal sector

Cereal production is not as dominated by large farming structures as the sugar sector: 51% of production is carried out by structures of less than 1,000 ha. It should be noted, however, that 22% of production is carried out by companies with more than 3,000 ha.

If Ukraine were to join the European Union, the country would account for 20% of European cereals production, with 49% of maize production and 15% of wheat production.

Ukrainian cereal production costs are on average 30% lower than those in Europe. 

For these reasons, grain imports from Ukraine have doubled between 2019/21 and 2023. The European Union has become a pillar of support for the Ukrainian economy, accounting for 51% of wheat exports in 2023, compared to 30% in 2021.

 

More analysis : 

Impact of EU enlargement to Ukraine on the sugar sector

As part of the process of enlarging the European Union to include Ukraine, Farm Europe has analysed both the weight and comparative competitiveness of Ukraine’s main crop sectors compared to those of the European Union. 

The difference in competitiveness ranges from 19% to 39% depending on the sector, with structural factors accounting for most of the difference. To this must be added the ‘carbon’ competitiveness conferred by the natural richness of Ukraine’s soils.

At a time when the steps and conditions of accession are about to be drawn up and the pre-accession programmes defined and launched, we feel it is important that objective data can serve as a basis to define the European Union’s roadmap, without bias or avoidance.

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Ukraine has much lower labour and investment costs. What’s more, the presence of fertile soils means that fewer inputs are used on crops: up to 1.5 times less fertiliser than in the European Union.

The opening up of the European market to Ukraine has resulted in an influx of sugar, which has led to an increase in European stocks. Exports of sugar from Ukraine to Europe have increased by 230% between 2022 and 2023, with a forecast export capacity to the EU of 800,000 tonnes to 1 MT. The introduction of safeguard measures now limits exports for the time they are in force.

 

More analysis : 

Carbon removal certification: covering both emission reduction & sequestration

To meet its climate objectives, the European Union needs a strategy to support the implementation and deployment of carbon mitigation solutions. The stakes are high: Europe aims to have its Forestry andAgricultural Land Use sector climate-neutral by 2035.

The EU developed a system of incentives that would allow land managers, including farmers, to be rewarded financially for their transition towards low-carbon agriculture. Today, however, the agricultural sector emits 424 Mt CO2 eq/year, while the land use sector compensates for only half of its emissions (net LULUCF balance: -226 Mt CO2 eq).

Therefore, achieving a neutral balance in the next ten years is a major challenge.

Currently, the European Parliament is working on the carbon removal certification framework proposed byt the European Commission, which is a flagship regulation toward this goal. It aims at creating a system of incentives that would reward land managers, especially farmers, for mitigating emissions through the adoption of carbon farming practices.

Carbon farming” includes agricultural practices that allow :

  • Carbon removal/sequestration (carbon capture and storage in soil and biomass);
  • To avoid future emissions of CO2 and other GHGs (prevention of loss of already stored carbon);
  • To reduce existing CO2 and other GHG emissions.

The total global terrestrial mitigation potential is of 13.8 Gt CO2eq/year. Forests and other ecosystems account for the largest share of these mitigation measures, with a potential of 6.6 Gt CO2eq/year or nearly 50% of the global terrestrial potential. The reduction of global deforestation is the action with the highest potential mitigation, amounting to 25% of the total global mitigation potential (3.5 Gt CO2eq/year). Meanwhile, agriculture has the second largest share of land-based mitigation with a potential of 5.3 Gt CO2eq/year, or 38% of the global terrestrial potential (Figure 1).

The EU provides a land-based mitigation potential of 0.52 Gt CO2eq/year, which is less than 4% of the total global mitigation potential. By comparison, Brazil alone represents three times the European mitigation potential (1.6 Gt CO2eq/year), a potential mainly covered by mitigation linked to the reduction of deforestation in the country. Worldwide, 15 countries account for 62% of the total global mitigation potential. Most of thesecountries have, however, low feasibility potential (due to low levels of development).

The European Commission wants to develop a legal framework for the certification of carbon mitigationpractices in the agricultural sector and encourage farmers to increase their contribution to the achievement of climate goals by remunerating them for implementing agricultural carbon mitigation activities. This framework for carbon farming is subject to many uncertainties and issues that need to be addressed to harness its potential against climate change. A robust climate and environmental model is needed. The legislative framework for the certification and remuneration of CO2 elimination/reduction actions will have to address the following issues to ensure results that are compliant with EU climate requirements:

ADDITIONALITY

Only mitigation by carbon agriculture that goes beyond the legislative status quo will have a robust impact on the climate. Additionality is an essential condition in the design of the future European carbon agriculture rewards mechanism.

NO DOUBLE COUNTING

Carbon mitigation is additional if each carbon unit generated is counted only once. Carbon exploitation mechanisms will need to be strict and transparent enough to ensure the integrity of the carbon agriculture reward model.

REDUCTION & STORAGE

Assessing only carbon sequestration resulting from Carbon Farming actions can lead to serious calculation errors. An assessment based solely on sequestration overshadows the potential negative externalities of emission reduction practices. There is a close link between emissions and storage: the same practice can make it possible to increase carbon sequestration while increasing emissions (and vice versa), which can lead to counterproductive results. A results-based model that is robust at the climate and environmental levels must not separate reduction from sequestration.

IMPERMANENCE

Some changes, whether intentional or not, can lead to risks of inversions and losses of captured carbon. It is impossible to guarantee carbon storage in the agricultural sector for as long as it is often required (100 years). In order not to discourage sequestration actions, which in the short term can account for significant amounts of carbon, shortterm storage should be encouraged to stimulate farmers’ transition and investments in sequestration practices. Various mechanisms exist to integrate short-term storage into the carbon market and the associated risk which should be deployed: reserve funds, insurance, rebate systems, etc.

LEAKAGE EFFECTS

Climate change has no borders. If carbon mitigation measures in Europe lead to an increase in emissions in the rest of the world, the real impact of Europe’s climate actions will not be perceived. In particular, carbon farming actions leading to a decrease in European food production could lead to increased compensatory agricultural production at the global level, and therefore towards a less regulated production, polluting and emitting more GHGs. Therefore, the concept of Carbon Farming must be considered in perfect harmony with the primary vocation of agriculture: food production.

IMPACTS AND CO-BENEFITS

There is a risk that some mitigation measures will negatively affect other ecosystem aspects, such as biodiversity, soil health, air and water, or society. The Carbon Farming model will have to be consistent with the various EU environmental directives and regulations. Carbon agriculture programs must be able to support the full social, environmental and socio-economic objectives of the European Green Deal. There are many environmental crises, the climate crisis is just one of them.

Scaling up a Carbon Farming model requires reducing the uncertainties for farmers, and for all stakeholders involved. A standardization effort at the EU level is to be carried out, and the control and certification of these practices will have to follow high standards so that the certificates issued guarantee true environmental integrity.

There are close links between these different Greenhouse Gases (GHGs). Therefore, focusing only on measures of carbon storage or reduction of emissions (CO2, N2O, CH4) can have antagonistic effects and lead to harmful net emission balances.

In particular, because carbon storage in agricultural soils is directly proportional to the amount of biomass produced, reducing the production of biomass leads to risks of carbon removal from the soil.

For example, reducing a nitrogen input (to reduce N2O emissions), mechanically reduces biomass productionand therefore storage capacity. The introduction of pulses can also lead to a risk of soil destocking due to theiroften lower C/N ratio than other crops and sometimes lower biomass production. Conversely, increasingbiomass production by adding fertilizers can increase carbon sequestration in soils but also increase GHGemissions.

It is often difficult to reduce emissions without removing carbon from the soil, and conversely to store carbon in the soil without increasing emissions. These agronomic arguments based on the experience of actors in the field suggest that a method opting for a distinct approach between these two positions would lead to climatic aberrations. A comprehensive measure of the variation in greenhouse gas emissions and carbon storage caused by a project is required.

Links between sequestration and emissions are clear, and the rational at macro and micro level to cover both in the same regulation. Therefore, Farm Europe considers this regulation as a unique opportunity to send a clear signal to EU farmers and to unleash the potential of carbon farming practices, covering both, storage and emissions reduction.

Our case study on a farm in Eastern France confirm the need to cover both reduction and storage in a single scheme for agronomic, climate and economic reasons.

On this farm, since the end of 1990, an increase in the organic matter (OM) content of +12‰ has been identified, directly reflecting a proportional increase in the carbon content of the farm’s soils. This increase in soil carbon stocks should be compared with an increase in irrigated maize areas combined with an increase in crop productivity on the same period.

Maize and wheat crop yields have increased by +100% and +70% respectively since the 1970s. These results showcase the direct link that exists between the amount of biomass produced and the levels of carbon storage in soils.

This data clearly shows that it is possible to increase soil carbon storage while improving crop productivity. Europe’s low-carbon agriculture policy will have to prevent productivity losses in the EU, as the challenges of increasing global export emissions are considerable.

The farm in question has recently embarked on a low-carbon transition through three levers:

  • a reduction in GHG emissions from fertilization,
  • a reduction in off-farm emissions, and
  • an increase in soil carbon storage.

The operating balance after the implementation of the project is estimated at 288 tCO2eq/year (excluding hedge storage), a decrease of -13% compared to the initial situation. This balance represents a relatively high level of emissions depending on whether this figure is related to the ha or tonne produced. The emission level per ha is relatively high (4 tCO2eq/ha/year), while on the contrary, per tonne, the emission level is very low (0.4 tCO2eq/TMS/year). In a context, where leakage effects and food security constitute important climate and security issues, emission levels reported per tonne produced appear to be a more relevant way of measuring the climate impact of a farm.

LIVESTOCK IN THE UE – PERIODIC NEWS

INTRA-EU NEGOTIATIONS
Council reaches agreement on amendments to the Industrial Emissions Directive. The Member States amended the Commission’s proposal. This proposal will serve as a basis for negotiations with the European Parliament.

For MEPs, the Commission’s fertiliser strategy, which proposes mobilising the crisis reserve and increasing state aid ceilings, will not be enough. The demands are for the mobilisation of effective instruments in the longer term.

The Latvian and Lithuanian delegations draw the attention of the Commission and the Member States to the deteriorating situation in their dairy sectors. Exceptional and immediate financial support from the EU is requested by Latvia, Bulgaria and Lithuania.

NUTRITION – LABELING
The French Nutriscore no longer seems to be the only option for the Commission to design a European scheme. Brussels is currently examining the various existing display systems.

TRADE
The European agricultural sector is concerned about the planned agreement between the EU and Mercosur. While the German government defends the agreement, some Member States, such as France and Austria, share the concerns of the agricultural sector. France is demanding mirror clauses to ensure a level playing field.

REPORTS
A new EFSA report recommends avoiding the use of cages in laying hen and broiler farms.

The Commission’s Report on Pigmeat was presented. It provides socio-economic, environmental, health and animal welfare recommendations.

According to data published by the EU’s Copernicus Climate Change Service, the average temperature in Europe was 1.4 degrees Celsius above the 1991-2020 average (over the December/February period). The areas at risk are mainly northern Italy, France and Spain.

Full note available on FE Members’ area.

NUTRITION & HEALTH : IMITATION MEAT DEBUTS IN THE USA

In November, the US Food & Drugs Administration, the public office responsible for food safety, approved the first step that opens the door to commercialization to an imitation of ‘chicken’ produced in the lab by UPSIDE Food. At the same time, ingredient-provider start up is proposing to replace bees with bioreactors and precision-fermentation to supply the honey of the future. A study that was published analyzing the change in diets (based on fewer animal-based products) confirms that it could lead to a resurge of iodine deficiency disorders, with potential long-lasting impact on brain development.

More delays expected for the front-of-pack nutritional labelling dossier: in fact, even if the Commission was expected to start discussing draft legislation under the Czech Presidency of the Council, during several public events, it announced that the dossier still needs further analysis, and an impact assessment is undergoing. Probably, it will be the Swedish Presidency that will have to handle this file … if the Commission proposed a draft in the next six months.

New literature finds that industrial products that aim to imitate meat contain ‘anti-nutrients’, that do not allow the body to correctly absorb specific nutrients such as iron and zinc.

full note available on FE Members’ area

FARM TO FORK STRATEGY: MEMBER STATES CALL FOR A NEW REVISION OF SUR

November was marked by the Commission communication on fertilizers whose aim is to face the consequences of the skyrocketing prices for this agricultural input for farmers.

On the legislative dossiers, the revision of the sustainable use of pesticides has also been affected by the current crisis and the consequences of the Russian aggression to Ukraine, having an important group of member States calling for the Commission to reconsider its proposal and demanding a new Impact Assessment that considers the new situation. Mid-December, the Council adopted a formal decision asking the Commission to improve its impact assessment within a maximum period of 6 months.

The Commission also advanced ideas on the Carbon certification dossier, specifying that this certification will be granted to farms that put into practice activities that have neutral or positive impact on the environment, create a net gain in CO2 presence in the atmosphere, are additional, aim to be long-term, and are monitored.

Over the month of December, animal welfare standards have been discussed at the EU level. The EU ministers informally find an agreement on the fact that if higher standards will be applied to animals raised in the EU, so will the ones be coming from third countries (‘mirror clauses’). To set the basis for the revision of the EU legislation on the matter, the Commission presented an evaluation of the current law, concluding that the current set-up does not allow to meet current and future needs.

December also marked a provisional institutional agreement over deforestation law. Once adopted and applied, the new law will ensure that a set of key goods placed on the EU market will no longer contribute to deforestation and forest degradation.

full note available on FE Members’ area

NEW GENOMIC TECHNIQUES: UK AS A FRONTRUNNER FOR NEW LEGISLATION

While at the European Parliament the political group of the Greens hosted the ‘GM-free Europe’ event where policy makers and stakeholders from national and NGO organisations expressed worries around the possibility to a deregulation of ‘new GMOs’, the Commissioner for Health replied to the chair of the AGRI Committee saying that new technologies could be a way to help the implementation of the Farm to Fork objectives on pesticide reduction.  Meanwhile, Presidents of several agricultural value chain organisation addressed a letter to the European Executives on the matter of NGTs, arguing for a timely adoption of the revision proposal and defending the positive aspects that these techniques will have for sustainability standards.

In the UK, concrete steps have been made towards the approval of a new legislation.

full note available on FE Members’ area