Fundamental changes in the European agro-sector: resolving challenges

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The EU “farm-to-fork” strategy offers a clear roadmap for a truly sustainable, healthy and fair food-farming system, while supporting farmers, ensuring future food security. However, agro-industry lobbyists, as well as some European Commission’s departments, are not truly anxious to implement the strategy. While the new CAP is becoming a stronger driver for national agro-business, however problems still exist… 

New European agro-strategy challenges the existing by-and-large farming system in the member states that presently fails to consider climate, biodiversity and other basic social and nature-protection needs. One could really wonder why the Farm to Fork Strategy (FTFS) and new CAP reform for 2023-27 are so vital and how to implement the necessary transitions in order for the EU agro sector to survive and succeed?
Ambitiously enough, the Commission website on agro-food (which includes eight different sectors) says that “the European Commission ensures the safety and quality of agricultural and food products, supports producers and communities, and promotes sustainable practices”.
Source: https://commission.europa.eu/food-farming-fisheries_en

Recent transitional period
Already in June 2018, the European Commission presented legislative proposals on the common agricultural policy, CAP for the period 2021-27; then in June 2021, following extensive negotiations between the European Parliament, the Council of the EU and the Commission, an agreement was reached on the new CAP. After a formal approval of the reform legislation by the European Parliament and the Council in the autumn of 2021, the new CAP becomes effective from 1 January 2023.
In order to allow for continued payments to farmers and other CAP beneficiaries, a transitional regulation period has been introduced during 2021-22. The transitional regulation were to extend most of the CAP rules (that were valid during the 2014-20 period), while also including new elements to make a stronger contribution to the European Green Deal and to ensure a smooth transition to the future framework of the national CAP strategic plans.
The transitional period was aimed at providing governance in the EU states with sufficient time to design and prepare for the implementation of their respective CAP strategic plans; this work was done with the active assistance from the Commission.
During 2021-27, besides the existing funding drawn from the CAP’s budget allocation, additional €8 billion from the NextGenerationEU recovery instrument are assigned to the European agricultural fund for rural development.

New CAP: 2023-27
The new common agricultural policy for 2023-27 is presently the main instrument to secure the future of agriculture and forestry, as well as achieving the objectives of the European “green deal”. The reform of the common agricultural policy was formally adopted in December 2021; new legal means –beginning from January 2023 – will to secure faire, greener and profitable CAP. It will seek to ensure a sustainable future for European farmers, provide more targeted support to smaller farms, and allow greater flexibility for EU states to adapt to new CAP measures. Agriculture and rural areas are still the focal points of the European Green Deal; hence the new CAP will be a key tool to implement ambitions “farm-to-fork” and biodiversity strategies.

     Note: on the “green deal” see: https://commission.europa.eu/strategy-and-policy/priorities-2019-2024/european-green-deal_en; on FTFS in: https://food.ec.europa.eu/horizontal-topics/farm-fork-strategy_en; and on biodiversity strategy for 2030 in: https://environment.ec.europa.eu/strategy/biodiversity-strategy-2030_en

It is vital to mention CAP’s financial facilities: €387 billion in funding has been allocated to the CAP for the 2021-27 periods. This will come from two different funds: the European agricultural guarantee fund (EAGF), which has been set at €291.1 billion (in current prices); and the European agricultural fund for rural development (EAFRD), which will amount to €95.5 billion.

New CAP’s objectives and goals
The Commission acknowledged that the new CAP, as “a modernised policy with a strong emphasis on results and performance”, is linked to common EU goals for social, environmental, and economic sustainability in agriculture and rural areas; however, a new CAP has a number of specific objectives, which are mainly connected to the “greener CAP” resolution.
Some of the new CAP‘s goals and objective are listed below:
= As soon as the EU-wide CAP shall be in line with the European environmental and climate legislation, each EU member states’ CAP’s plans will be oriented to reach higher ambition on environment and climate action compared to the previous periods, and will be required to update their plans according to modified EU climate and environmental legislation.
= The EU member states’ strategic CAPs will contribute to the European “green deal” targets; the national CAP strategic plans will follow the CAP recommendations that reveal the ways to fulfill the “contributions”.
More in: https://agriculture.ec.europa.eu/cap-my-country/cap-strategic-plans_en, and https://agriculture.ec.europa.eu/cap-my-country/cap-strategic-plans_en#cap-strategic-plans-recommendations.
= CAP beneficiaries in the states will have their payments linked to a stronger set of mandatory requirements: e.g. every farm with at least 3% of arable land will be dedicated to biodiversity and non-productive elements, with a possibility to receive support via eco-schemes to achieve 7% support; wetlands and peat lands will be also protected.
= special attention is given to the so-called eco-schemes: about 25% of the EU’s budget for farmers’ direct payments will be allocated to eco-schemes, providing stronger incentives for climate-and environment-friendly farming practices and approaches (such as organic farming, agro-ecology, carbon farming, etc.) as well as animal welfare improvements.
= As to the rural development in the EU states, at least 35% of CAP funds will be allocated to national measures to support climate, biodiversity, environment and animal welfare.
= As to the fruit and vegetables sectors, EU-wide CAP allocates at least 15% of their expenditure towards the environmental protection, compared to 10% in the current programming period.
= Supporting young farmers: EU countries will have to distribute at least 3% of their direct payments budget towards young farmers; e.g. in the form of income and investment support, as well as for start-up aid for young farmers.
= Finally, additional attention to climate and biodiversity: 40% of the CAP budget shall be climate-relevant and strongly support the general EU commitment to dedicate 10% of the EU multiannual budget to biodiversity objectives.
Reference to: https://agriculture.ec.europa.eu/common-agricultural-policy/cap-overview/new-cap-2023-27_en

Improving agro-competitiveness
The new CAP is supposed to strengthen the position of the EU-27 farmers in the supply chain and boost global competitiveness of the Union’s agro-food sector. The following measures are mentioned by the Commission:
= improving “bargaining power”: i.e. the new CAP rules will reinforce producer cooperation, encourage farmers to work together and, possibly, enabling them to create countervailing power facilities in the market;
= market orientation: the new CAP maintains the overall market orientation from the previous reforms, encouraging EU farms to align supply with demand in the European states and beyond;
= establishing “crisis reserves” in order to cope with future crises: the reformed CAP includes a new financial reserve amounting to at least €450 million per year; and
= providing support for the EU-wide wine sector: specific rules have been agreed to improve support for wine producers and manufacturers.

Problems…
Present CAP reforms are the result of serious problems in the EU member states’ agricultural systems, representing urgently needed measures to overcome possible crises. It has been clear enough that continuing the previous course of agro-development would just lead to critical situations both in the rural environment and in eco-food production. Hence, urgently needed reforms in order to divert from the existing “self-destructive mode” path, and adopt a farming system based on increasing farmers profits and protect EU and global nature. Besides, the “green eco-farming” is supposed to provide for smooth transition to ensure that no one is left behind.
One of the problem is a “too-regulated” agro-sector; the EU’s regulatory “burden” is really huge: presently, there are about 80 thousand various regulatory means covering about twenty economic sectors; e.g. there are about 6 thousand directives, over 29 thousand decisions, which makes it totally over 112 thousand legal acts for the socio-economic development in the EU-27. Among the EU policy sectors there are 17 sectors of purely social-economic significance: e.g. agriculture and rural development is definitely most regulated with over 3 thousand legal acts, followed by seemingly “not less complicated” external relations (with the same amount of regulation acts), industrial policy and internal market – with about 1,5 thousand, competition policy and law with over 1,8 thousand; and health, environment, consumes relations with 1,3 thousand legal acts…
Some experts acknowledge that without solid “transformational ground”, the EU’s commitment “to build a fair, healthy and environmentally friendly food system for all is on increasingly shaky ground”. Therefore, by “failing to transform the food system, it risks continuing down the ruinous path of nature loss, devastating climate extremes, economic vulnerability, and human misery”
References to Ibbott S. and Snelson B. Report in European Environmental Bureau, EEB: https://meta.eeb.org/2023/02/01/farm-to-fork-systemic-change-or-more-of-the-same/?mc_cid=549733dd32&mc_eid=97603c39a6/ 1 February 2023.

So-called “farm-to-fork” strategy (or FTFS, already in effect for about three years) represents one of the central elements in the EU-wide and more general “green deal” program; whereas the agro-green strategy’s idea is to create a “fair, healthy and environmentally friendly food system” in the EU member states. In general, the FTFS offers a holistic approach to production, distribution and consumption of food, while also protecting biodiversity and natural ecosystems. Besides, the FTFS is supplemented by some additional strategies, e.g. concerning biodiversity and forestry.
Ideally, the FTFS is a modern opportunity to support millions of farmers and food-processing workers in the member states to adopt sustainable production methods and/or shift to eco-farming. It is all sensible and responsible approach, though, as the above mentioned EEB reporters noted: “there are still many loud, influential voices declaring it overly ambitious, unprofitable and detrimental to the interests of EU food producers and global trade”. These voices are largely coming from the agro-industry’s lobby, which calls to dilute and weaken the strategy as “misinformed, ill-conceived and self-serving”.
There are numerous issues for agro-business in the member states to worry about in the coming years while implementing ambitious “green-agro” reform!

 

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