EU agricultural policy: resolute decisions in tough time

European consumers’ protection shall be more efficient by modernizing rules to follow citizens’ increased quality expectations in goods and services. Corresponding changes in the national economies will follow, as consumers’ preferences will “transform” agro-sector’s production in a more digital, green and sustainable way. The EU institutions will support the initiative. 

Present dramatic shifts in the EU-states’ agro-sector cooperation occurred in 2019, following a European Citizens’ Initiative (April 2018), when the Commission suggested a draft regulation on the transparency and sustainability in the EU risk assessment in food quality and safety (at the end of March 2021, the regulation became applicable).
The regulation not only marks an important step towards further modernisation of the member states food safety; the new rules will improve the transparency of the EU risk assessment regarding food and cover a wide range of products of great concern for citizens. However, striking differences exist among the states on households’ expenses for food, beverages and general consumption, which shows that the EU’s internal market’s convergence is far from being perfect.
Source: https://www.integrin.dk/2021/04/01/food-quality-the-european-priority/

Consumers in the EU member states are facing one of the major challenges, especially in the digital world which have revolutionized shopping, services and/or financial markets. Thus the EU is stepping up consumer protection on several directions: a) making it easier for consumers to avoid risks related to having a credit, b) making stronger rules for product safety in place, and c) putting more responsibility on market players to make it more difficult for “bad actors” to hide behind insufficient legal rules.
Reference to: https://www.integrin.dk/2021/07/18/product-safety-in-the-eu-consumers-protection-shall-be-extended/

In November 2020, the Commission started new efforts in the “consumer agenda”, with an objective to empower consumers with all the rights they could have within the rapidly changing digital environment. A relevant, proportional and effective proposal for consumers, in the first legislative part, included revision of the General Product Safety Directive from 2002, which will become a regulation; in the second legal part, it included a revision of the EU-wide rules on consumer credit dated from 2008. Both legal instruments were addressing a rapidly developing challenge in digitalisation, which the pandemic only fuelled.
At the time of the Product Safety Directive (2002), only 9% of Europeans purchased online; today, this figure presently is over 70%. Consumers also buy more and more technology related products, such as wireless earplugs and/or gaming consoles; thus, too many flawed or unsafe products are being available online and no one feels responsible for their quality and possible removal.
Besides, the pandemic accelerated the negative sides of the process: e.g. a flood of deceptive and even dangerous products that were supposed to help keeping people safe from the coronavirus; some of them very expensive, which affected consumers’ financial situation. At the same time, the access to credit has become easier with a possibility to borrow money just with few mobile phones’ clicks. Being good in principle, the situation did not provide adequate protection to consumers: already before the pandemic, one in ten EU consumers had arrears (delays) on mortgage or rent, utility bills or hire purchase.
The number of over-indebted households is expected to increase in the post-pandemic period: a recent Commission’s survey (March 2021) showed that on average 38% of consumers have had concerns on how they are going to pay their bills next month; the situation varies greatly among the EU member states – from 7% to 71%.
While addressing these gaps, present proposals suggest that the online marketplaces selling digital products will have the responsibility to ensure that all the products are safe, regardless where they come from. With the revision of the consumer credit directive, the EU will secure that information related to credits must be presented in a clearer way so that customers would know what they are signing up for. Thus, the financial institutions cannot hide behind the wall of legal language or put the consumer under overload of information.
Reference to: https://ec.europa.eu/commission/presscorner/detail/en/speech_21_3361

Modern challenges and recovery efforts
This March, the Commission urged the states to revise their agro-strategy plans with a view to support farmers in adopting practices in such spheres as reducing the use of fertilizers and/or optimizing the general efficiency of national agro-sector. This can be done specifically through precision and organic farming, agro-ecology, reducing use of antibiotics and pesticides, as well as more efficient training on nutrition management, etc.
The EU’s ambitious targets in the “farm to fork strategy” intends to avoid nutrient losses by reducing fertilizer use by at least 20% by 2030 and to reach at least 25% of EU agricultural land under organic farming by 2030; it will favour the development of EU-grown protein plants, which naturally enrich the soil reducing the need for synthetic fertilizers.
The future CAP provides several supportive instruments in this respect, for instance, sectoral operational programmes that the EU states may implement in the plant protein sector, eco-schemes that would reward the integration of legumes in rotation plans and coupled income support for protein crops.
In the framework of Horizon 2020 and Horizon Europe, the EU is investing in research and innovation programme that supports activities in themes such as breeding of protein plants, feeding, sustainable use of resources, alternative proteins for feed and food, and animal health and welfare.

Agro-policy in transformation
There is a clear need to strengthen resilience, reduce energy dependence (on synthetic fertilizers and scale up the production of renewable energy) and preserve and expand sustainable production capacity. These are all core elements of sustainable agriculture and reflected in the Farm to Fork approach.
This is why the Commission will support activities such as boosting sustainable biogas production and use as well as carbon removals, improving energy efficiency, extending the use of agro ecological practices and precision agriculture, reducing dependence on input and fodder imports through sustainable livestock systems and fostering protein crop production, and spreading through the transfer of knowledge the widest possible application of best practices.
The Commission is assessing the states strategic plans in accordance with the sector’s economic, environmental and social considerations.
At the end of 2021, the EU adopted a regulation (nr. 2115) establishing rules on support for strategic plans to be drawn up by the member states under the common agricultural policy (so-called CAP Strategic Plans) and financed by the European Agricultural Guarantee Fund (EAGF) and by the European Agricultural Fund for Rural Development (EAFRD); this regulation repealed a couple of previous ones from 2013 (nrs. 1305 and 1307).
In the Commission communication (29.xi.2017) “The Future of Food and Farming” some objectives and orientations for the future common agricultural policy (CAP) after 2020 have been set up. These objectives were aimed at making CAP more result-driven and market-oriented by boosting modernisation and sustainability, including economic, social, environmental and climate sustainability of the agricultural, forestry and rural areas, as well as helping to reduce administrative burden for farmers.
Rules on measures linking the effectiveness of the EU funds to sound economic governance, on territorial development and on the visibility of support from Union funds laid down in a regulation adopted in June 2021 (nr. 1060*) should also apply to support for rural development to ensure coherence with the Union’s funds.
*) Note. Regulation (EU) 2021/1060 of the European Parliament and of the Council of 24 June 2021 laying down common provisions on the European Regional Development Fund, the European Social Fund Plus, the Cohesion Fund, the Just Transition Fund and the European Maritime, Fisheries and Aquaculture Fund, etc. in: OJ L 231, 30.6.2021, p. 159.

Agro–sector has huge potentials in reducing fuel dependence in Europe; according to Imperial College London Consultants, potential availability of sustainable biomass (without damage to biodiversity) could support an advanced biofuel production of up to 175 million of tones of oil equivalent by 2050. Thus, in the EU low-carbon liquid bio-fuels could be a feasible option with short and long-term benefits: e.g. existing vehicles can be decarbonised, and the build-up of production capacity for these fuels will be reduced in cost, due to the economies of scale. Besides, over time, liquid fuels’ reduction from road transport will free-up growing volumes for aviation and maritime at an affordable price.

Global agricultural markets: effects of Russia-Ukraine military conflict
There is no immediate threat to food security in the EU as the EU is a big producer and a net exporter of cereals. The immediate impact rather lies in the increase of costs throughout the food supply chain, the disruption of trade flows from and to Ukraine and Russia, as well as to their impacts on global food security.
Ukraine and Russia are important suppliers to global markets especially for cereals and vegetable oils. Ukraine accounts for 10% of the world wheat market, 13% of the barley market, 15% of the maize market, and is the most important player in the market for sunflower oil (over 50% of world trade). As far as Russia is concerned, these figures are respectively 24% (wheat), 14% (barley) and 23% (sunflower oil). North Africa and the Middle East import over 50% of their cereal needs from Ukraine and Russia. Ukraine is also an important supplier of (feed) maize to the European Union and China. While key customers of Ukrainian and Russian wheat reportedly have stocks for some months, price increases are already felt in some countries. For instance, Yemen, Bangladesh, Pakistan, Sudan, and Nigeria are important importers, many of them already severely food insecure.
For 2021-24, the EU is pledging at least €2.5 billion (€1.4 billion for development and €1.1 billion for humanitarian aid) for international cooperation with nutrition objectives. The EU will fund development and humanitarian actions in nutrition-relevant sectors including food assistance, agriculture, water, sanitation and hygiene, social protection, health, education, to help improve nutrition outcomes; during 2021-27 the EU’s international cooperation programs will support food systems in about 70 partner countries.
The inflation on consumer food prices was already fast going up in several EU states even before Russian invasion in Ukraine owing to high energy and other inputs costs; presently, there is further pressure with the disruption of trade caused by the conflict. The trade in grain, energy and fertilisers is particularly affected, and this is noticeable in rising prices for these commodities.
The EU is a net food exporter and the Common Agricultural Policy (CAP) maintains sufficient availability of food and reasonable prices for consumers. A well-functioning food supply chain, including a competition framework that takes account of the characteristics of the agricultural sector, and a fluid single market allow for the best allocation of resources between food operators in the EU, leading to the best value for money possible for EU consumers.
However the food price increase will impact low-income consumers. The first line of support for these vulnerable groups is through national social protection programs aided by EU Fund for European Aid to the Most Deprived (FEAD), which supports food banks throughout the EU. And of course, rates of Value Added Tax (VAT) on food can also be reduced down to zero to lower food costs to consumers.

Financial support to farmers
About €500 million will be distributed to farmers in the EU member states. In the 2022 budget, like in previous years, a reserve intended to provide additional support for the agricultural sector in the case of major crises affecting the agricultural production or distribution (“the reserve for crises in the agricultural sector”) has been established by applying a reduction to direct payments with the financial discipline mechanism.
While the market needs to gradually adjust to new circumstances, support is needed for producers in sectors where input costs are rising to unsustainable levels and where products cannot find their normal market outlet. In order to react efficiently and effectively against this threat of a market disturbance, the Commission will distribute national envelopes to Member States so they can support the producers in the EU agricultural sectors affected by market disturbance induced by the war in Ukraine.
Member States should design measures which contribute to food security or address market imbalances. The measures should target farmers who are the hardest hit by the crisis. Support under these measures should be prioritising if they engage in one or more of the following activities pursuing these goals: circular economy, nutrient management, efficient use of resources, and environmental and climate friendly production methods.
EU states should also ensure that, when farmers are not the direct beneficiaries of the payments of the Union aid, the economic benefit of the Union aid is passed on to them in full.
The member states have to notify the Commission not later than 30 June 2022 the measures they will take, their intended impact and the criteria for granting the expected aid.
Thus, in the Baltic Sea region the farmers in the member states will be able to receive the following support (in mln €): in Denmark – about 10.4, in Germany – 60, Estonia – 2,5; Latvia – 4,2; Lithuania – about 7,6; Poland – about 44,8; Finland – 6,8; and in Sweden – about 9mln.
Reference to: https://ec.europa.eu/commission/presscorner/detail/en/QANDA_22_1964

More information in the following Commission’s web-links: – Communication on safeguarding food security and reinforcing the resilience of food systems; – Annex on safeguarding food security and reinforcing the resilience of food systems; – Press release: Commission acts for global food security and for supporting EU farmers and consumers; – Factsheet on measures to safeguard food security and support EU farmers; – The European food security crisis preparedness and response mechanism; – The European Pigmeat Reflection Group

 

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