The European Commission’s response to the disruptions in the global food supply chain caused by the Ukraine war shows both the power and the limitations of the EU’s agri-food policy, which is capable of supporting production but not of addressing social aspects.
In a communication published on Wednesday (23 March), the EU executive presented a series of actions designed to enhance global food security and to support EU farmers and consumers in the wake of the war in Ukraine.
The measures included in the communication were centred around two main concepts, namely food accessibility and food affordability.
However, the bulk of short-term and medium-term actions aim at increasing the productivity of the sector rather than improving the accessibility side of the food security coin.
To give one example, the huge support package of €500 million, partially funded by the never-before-triggered crisis reserve fund, to support the producers most affected by the serious consequences of the war in Ukraine.
But here’s the thing: the communication also firmly states that despite concerns of supply shortages in the bloc, food supply “is not at stake in the EU today.”
Instead, the communication warns the real risk is that the combination of high input costs, disrupted production in Ukraine and sanctions against Russia may drive food prices further up to the point where food becomes inaccessible for the EU’s poorest.
In a nutshell: availability of food in Europe is not an issue, but affordability might be.
The communication makes no secret, for instance, of the fact that inflation in general – and food inflation in particular – has been rising sharply.
Food prices in the month of February have increased by 5.6% which, in the context of the very stable and low inflation we’ve had for the past couple of decades, is incredibly high.
This also puts pressure on citizens, since food is a very significant share of their overall spending. Not to mention they are are already being squeezed by higher energy prices.
Curiously, despite the highest pressure being on food affordability, there is only a measly offering of weak measures to address this.
One way the Commission proposed to help alleviate the impact of high food prices on the most vulnerable is by encouraging member states to implement reduced rates of Value Added Tax (VAT).
In December 2021, the Council agreed on a reform of VAT rates at the EU level, enabling member states to further reduce their rates down to 0% on certain goods and services that address basic needs, most notably food.
The other two tools are a generic “encouragement” to economic operators to contain retail prices, and to member states to use the EU budget in the Fund for European Aid to the Most Deprived (FEAD) which supports EU countries’ actions to provide food and/or basic material assistance to the most vulnerable.
That’s almost all that can be done at the European level. Asked by EURACTIV, a Commission official suggested not to expect that much from the EU side as there is not a wide range of tools to address the issue of affordability.
“There are so many things the Common Agricultural Policy (CAP) can do but obviously one of the things that CAP cannot do is to address issues related to social policy,” said Tassos Haniotis, deputy director-general of the European Commission’s DG AGRI.
Member states are expected to come up with macroeconomic measures to address the social dimension of the current crisis, which also proved to be quite tough on the energy side.
In the long run, there is also the risk of the so-called stagflation phenomenon – a combination of price inflation and slow economic growth, which was experienced in the 70s – which can exacerbate the situation.
But even in that case, there’s nothing much that can be done, apparently.
“It is something that is beyond the scope of CAP,” said Haniotis, adding that it is, obviously, a situation that the Commission will keep monitoring.
At the member state level, joint purchase of gas but also the revolutionary Recovery fund show that in case the food affordability scenario deteriorates, there is the possibility of a common response to cope with increased energy and food prices.
On the sidelines of the EU summit, an EU diplomat told EURACTIV that the range of investments that could be funded by a common effort has opened up considerably in case of future crises.
At the same time, the post-2020 CAP reform introduced a new concept of social dimension that could lay the ground for a third “pillar” for the EU’s farming subsidy programme in the near future.
Currently, the CAP is made up of two main items: direct payments to farmers, which together with market-related expenditures form the so-called first pillar, and support for rural development, which is considered as the CAP’s second pillar.
The third pillar, currently taking shape, is still mostly focused on the rights of farmworkers, but there is room for something more.
The Commission is expected to monitor the impact of the social conditionality mechanism on workers and to come up with a study evaluating the progress made.
In case the study shows that the social dimension of the CAP works, the Commission might decide to enhance it and possibly enlarge its scope or the list of areas that will be subject to social conditionality.
Perhaps enough to support households coping with increased food bills in times of crisis? It is still too early to say.
By Gerardo Fortuna
Agrifood Podcast
This week, EURACTIV’s agrifood team discusses food accessibility, affordability and security in light of the Ukraine war, as well as the news that the European Commission decided to ‘postpone’ (although not in their words) the proposal of the sustainable use of pesticides directive. To help us do so, we are joined by Marilda Dhaskali, EU agriculture policy officer at BirdLife Europe, Olivier de Matos, Director General of Croplife Europe, and Pauline Constant, head of communications at EU consumer organisation, BEUC.
Agrifood stories of the week
Russia deliberately targets Ukraine’s food supply to create hunger, says Commission
Russia is deliberately targeting Ukraine’s food supply in a bid to create hunger in the country, according to EU Agriculture Commissioner Janusz Wojciechowski, who drew parallels between now and the great famine of the 1930s, the ‘Holodomor’. Natasha Foote has the story.
Ukraine’s agri minister calls on EU for help just before resigning
Ukraine urgently needs help to safeguard food production as global shortages loom, then-agriculture minister Roman Leshchenko warned in an address to EU lawmakers, where he denounced large companies for doing business with Russia while doing little to support Ukraine. Julia Dahm has more.
Agriculture is a ‘crucial security policy’ for EU, says Commission
Agriculture has become a key security policy for the EU in light of the war in Ukraine, according to the EU Agriculture Commissioner Janusz Wojciechowski, who placed the sector alongside the likes of energy. EURACTIV’s agrifood team has more.
EU food supply will remain secure, but less accessible for Europe’s poorest
Food supply is not at stake in the EU despite the ongoing war in Ukraine, but soaring food prices may mean low-income households struggle to access it, according to the European Commission’s new communication on food security. Learn more.
Member states call for unified EU plant protein strategy
Member states have joined forces to call for an EU-wide plant protein strategy, which they say is needed “more than ever” in light of the war in Ukraine, but the European Commission is currently unwilling to play ball. Natasha Foote has more.
EU holds pesticide reduction, biodiversity preservation proposals amid Ukraine war
The European Commission has pushed back the tabling of its ‘Nature protection package’, which included the proposal to slash the use and risk of chemical pesticides in half by 2030 and nature restoration targets which aim at halting biodiversity loss in Europe. Gerardo Fortuna and Julia Dahm have all you need to know.
CAP plan drafts fall short of environmental ambitions, says Commissioner
The Common Agricultural Policy (CAP) national strategic plans currently leave a lot to be desired, according to EU Agriculture Commissioner Janusz Wojciechowski, who said the majority fall short of the EU executive’s environmental ambitions. Learn more.
EU ministers back Spain’s call urging bloc to help fishing sector hit by fuel price hike
Spanish Agriculture Minister Luis Planas called on the EU to urgently help the fisheries sector during a Council of EU agriculture ministers on Monday (21 March). He was backed by more than 20 ministers from the bloc. EURACTIV France reports.
News from the bubble
No spring sowing on a third of Ukraine’s farmland: First estimates see one-third of Ukrainian fields remaining uncultivated this spring, according to national media reports. Especially in occupied areas and regions with active fighting, the agriculture ministry estimates that sowing will be severely compromised. Nevertheless, there are reports that spring sowing has begun in parts of southern Ukraine – where the sowing season begins earlier due to the warmer climate – despite fighting in the region.
Derogations: The European Commission confirmed that it will allow a derogation in the CAP environmental measures to allow crops to be planted on fallow land for the year 2022. This is estimated to bring an extra 4 million hectares into production, and farmers will have full flexibility to decide what can be planted. It has also encouraged member states to make the most of the flexibility of EU rules on maximum residue levels (MRLs) of pesticides to widen the market for imports of food. Meanwhile, discussions are ongoing on a derogation from the nitrates directive.
Organic awards: This week, the EU Commissioner for Agriculture Janusz Wojciechowski launched the applications for the first-ever EU organic awards alongside representatives of the awards’ co-organisers at a high-level event. These awards will recognise excellence along the organic value chain, rewarding the best and most innovative actors in organic production in the EU.
SUD – new date? Speaking in Prague this week, EU Health and Food Safety Commissioner Stella Kyriakides said the Commission will “before the Summer adopt a proposal on the Sustainable Use of Pesticides,” adding that the EU executive “already very much count[s] on the Czech Presidency to advance the work on this file”. Sources have said the new proposal date has been tentatively put in June.
Top trader: The total value of EU agri-food trade reached a record €328.1 billion in 2021, a 7% increase year on year, according to the European Commission’s monthly trade report for the year 2021, which was released this week. High-value products such as wine, spirits and liqueurs, and chocolate and confectionery performed strongly, while products more directly related to farm income such as pigmeat, dairy products and wheat were affected by reductions in export values and performed less strongly.
Support for pre-accession countries: The European Commission adopted rural development programmes (IPARD) under the instrument for pre-accession assistance for Albania, North Macedonia, Serbia and Turkey this week, with a budget of €112, €97, €288 and €430 million respectively. The programmes provide the basis for EU support in the field of agriculture, rural development and food security for the period 2021-27.
Agrifood news from the CAPitals
FRANCE
French presidential candidates in three camps on agri matters. The visions of France’s presidential candidates for the future of the Common Agricultural Policy (CAP) and the Farm to Fork Strategy range from “taking back control” over domestic production to putting the CAP in the service of environmental goals. Overall, the candidates can be put into three camps, EURACTIV France’s Hugo Struna explains.
SPAIN
Farmers take to streets to decry soaring energy prices. Tens of thousands of people took to the streets on Sunday to demand that the government take measures to protect rural economies from soaring energy prices, which have been forcing some sellers to retail below production costs. Get the full story here.
UK
No more free range eggs. Free range eggs are no longer available in UK supermarkets after the “largest ever outbreak” of bird flu kept hens inside for months, according to Bloomberg. UK-wide measures to tackle the outbreak of avian flu were introduced in late November 2021, including a legal requirement for farmers to house poultry indoors, such as in large barns for commercial flocks. Free-range egg packaging is now required to have stickers or labels marking them instead as “barn eggs”, and supermarkets have to display information in-store to explain to customers what is happening. (Natasha Foote | EURACTIV.com)
GERMANY
Berlin comes out against Commission food security measures. Even though Germany has itself put in place national measures to safeguard domestic food production, the agriculture ministry has criticised the Commission for going too far in this week’s food security communication. In a first package of measures tabled two weeks ago, the ministry had proposed that farmers should be able to temporarily use ecological focus areas for animal feed. The proposal still needs to be adopted in parliament as well as by the federal states. “We are interested in fast and pragmatic solutions,” state secretary Silvia Bender said. Meanwhile, the Commission’s plan to allow not only feed production put also the use of pesticides on protected areas “goes against our biodiversity and sustainability goals,” she said. (Julia Dahm | EURACTIV.de)
AUSTRIA
Austria wants children to learn about agriculture. The Austrian agriculture ministry has launched an initiative, titled “Agriculture and you,” to educate children on how their food is produced. The programme includes a picture book, an audio play, and an interactive website, among other things. School and kindergarten teachers can also make use of teaching material on food policy and even the EU’s Common Agricultural Policy. Using a mini gardening set, children can grow their own “crops,” such as tomatoes or radish. Agriculture “as a topic is often far removed from children and not really tangible for them,” minister Elisabeth Köstinger said. With the programme, “we want to explain to them in a fun way how agriculture works and why it is important for all of us,” she added. (Julia Dahm | EURACTIV.de)
SERBIA I NORTH MACEDONIA
Serbia to continue exporting key foodstuffs to North Macedonia. Serbia’s and North Macedonia’s ministers of agriculture agreed that Serbia will continue to export wheat, corn, flour and cooking oil to North Macedonia during the coming months. Earlier this month, Serbia had temporarily banned exports of key foodstuffs. You can find the full story here.
GREECE
Greek agri minister wants to strengthen farmers’ liquidity. During a meeting with the EU ministers in Brussels on Monday (21 March), Greek minister of rural development and food Georgios Georgantas said the EU would need to take action in four dimensions. He argued that common actions should include: increasing the amount of the crisis reserve, activating a measure using Pillar 2 resources, removing all obstacles to intra-community trade and tackling speculation. “The liquidity of farmers at this juncture must be strengthened in every possible way”, the minister stated, supporting the proposal for increased advances on direct payments and rural development measures. (Georgia Evangelia Karagianni | EURACTIV.gr)
CROATIA
New land consolidation bill presented in parliament. Agriculture Minister Marija Vučković presented a new land consolidation bill aimed at facilitating the integration of small and irregular parcels into bigger and more regular ones as prerequisites for increasing production, cultivating land, and upgrading local infrastructure. The money set aside to apply the law will help to consolidate 18,000 hectares, but there is interest in consolidating more, the minister said in parliament. 313 million kuna (€ 41,7 million) have been set aside for farmland consolidation until 2026, of which 263 million kuna come from the EU Recovery and Resilience Facility and 50 million from national funds. Land consolidation is of strategic interest to Croatia, the minister said. Meanwhile, Krešo Beljak of the opposition Croatian Peasant Party said that allowing foreigners to buy land would mean “game over” for Croatian farmers and agriculture. Croatia has an exemption for foreigners buying agricultural land until 2023. (Željko Trkanjec, Euractiv.hr)
IRELAND
Irish sector stands in line for €50 million EU aid. The European Commission has approved a new €50 million Irish scheme to support the beef sector affected by the coronavirus pandemic this week. The scheme was approved under the State Aid Temporary Framework and the aid will take the form of direct grants. (Natasha Foote | EURACTIV.com)
ROMANIA
Pig numbers dwindling. The number of pigs on Romanian farms has dropped by more than a third over the past decade, according to newly published results of the agricultural census. Find all the info here.
ALBANIA
Albania hit hard by bird flu. Almost half a million birds have been confirmed as being infected with bird flu in Albania, including poultry, but also wild birds such as pelicans, according to Exit.al, with researchers describing the situation as “unprecedented”. (Alice Taylor | Exit.al)
Events
30 March | Rural poultry: in line with European sustainability ambitions
31 March | COVID-19, the war in Ukraine, and rising food prices: how can we transform food systems in the face of constant crises?
[Edited by Nathalie Weatherald]