You ought to know this by now: agri-food policy embraces other policies too. Which means it shouldn’t be a surprise that even the proposal of a levy for carbon-intensive imports has important repercussions on European farming.
The EU’s agriculture sector is currently experiencing how a surge in global energy prices can have knock-on effects on agricultural produce, causing production costs to skyrocket.
Although all input prices – including seeds, metals, and plant protection products – have been increasing recently, the spike in the price of fertilisers has become particularly evident (and worrying).
According to the industry association Fertilizers Europe, a third of fertiliser and ammonia factories in the EU have either been forced to close down or temporarily scale down their production due to the rise in gas prices.
The most affected are the nitrogen-based fertilisers, as gas prices account for up to 80% of the variable costs in their production. This also led to a parallel increase in other fertilisers such as the potash- and phosphate-based ones.
Certain sectors are hit harder than others, particularly the field crops, for who a very large share of their input costs is accounted by fertilisers.
The current situation was addressed this week by EU’s agriculture Commissioner Janusz Wojciechowski in a hearing with MEPs in the European Parliament’s agriculture committee (AGRI) on Monday (10 January).
“The energy prices issue will not be solved without political instruments. Europe is indeed being blackmailed,” he said.
However, this critical situation should lead to a re-think of the agri-food chain, according to the Commissioner.
“We must think about how to make European agriculture more resilient. In such crises, a reduction in the use of fertilisers seems to be a good approach,” he added.
In its flagship food policy, the Farm to Fork strategy (F2F), the Commission proposed an ambitious 20% reduction in fertilisers use by 2030 compared to the EU’s current level.
Apart from the ongoing energy price crisis, another heavy factor could fall on farmers – with a resounding (C)BAM.
CBAM is indeed one of the most recent – and obscure – EU acronyms you can come across in the newspapers every now and then.
It stands for carbon border adjustment mechanism, which is a fancy way of calling Europe’s upcoming levy for carbon-intensive imports.
It’s basically an attempt to put a price on carbon-intensive imports, aimed at protecting EU businesses from unfair competition and preventing so-called carbon leakage – aka, where companies relocate to countries where it is cheaper to pollute.
The CBAM will be the external face of the controversial ETS (oh no, another EU acronym) which is the Emission Trading Systems, conceived to control emissions generated internally.
Just to be clear, agricultural products are not included in the current proposal for the EU’s carbon levy on imports.
But it’s true that the inclusion of fertilisers in the CBAM will have a significant impact on EU’s farmers, who may suffer additional costs.
The proposal is now in the hands of the European Parliament and EU member states, who will need to agree on a common text before the levy becomes a reality.
Although the Parliament’s environment committee (ENVI) is leading the file, the AGRI committee had its say on CBAM this week, filing its opinion and suggesting some amendments.
For the rapporteur of the AGRI opinion, Polish right-wing MEP Zbigniew Kuzmiuk, the mechanism could be a useful tool for the EU to help reduce carbon dioxide emissions globally.
“It has the potential to stop EU markets being flooded with cheaper imported products, often produced to the detriment of the environment and without any financial consequences similar to those imposed on the EU’s producers,” he said in a note.
However, the opinion warns of the unforeseeable impact of the mechanism on the EU’s farming sector, explicitly mentioning how the inclusion of fertilisers in the CBAM could lead to a further increase in agricultural production costs.
One amendment suggested by MEPs called on the Commission to combat the risk of carbon leakage through investment and improvements in the production conditions.
This includes more effective use of agricultural organic matter, such as livestock manure, but also the production of bio-fertilisers and soil improvers from agricultural biomass.
Lawmakers also proposed to support measures for farmers in adapting to changes in fertiliser prices or sourcing through Common Agricultural Policy (CAP) fund.
Amendments voted in AGRI are also oriented towards a future expansion of the CBAM to agricultural products. This is a move seen by many as protectionist, but one that European farmers associations seem to like.
This option is not included at the moment in the Commission’s proposal as it could risk upsetting third-countries, but is seen as a way for European producers to cope with asymmetries between the new high demands on them and lower sustainable standards of imported products.
Welcome back! For our first podcast of 2022, EURACTIV’s agrifood news team brings you up to speed with where we’re at on the CAP national strategic plans, we discuss tensions between wolves and EU farmers with the help of Dutch ecologist and wolf expert Glenn Lelieveld and we explore why upcoming changes in geographical indications have sparked some controversy.
Agrifood news this week
Agri Commissioner warns delays in CAP plans could cause ‘double standards’
EU Agriculture Commissioner Janusz Wojciechowski has reiterated the importance of member states submitting their national strategic plans simultaneously, warning that otherwise, this runs the risk of unfair assessment. Natasha Foote has the details.
MEPs concerned by ‘trademark’ approach for new geographical indications rules
European lawmakers expressed concerns over a change of course in the EU’s geographical indications (GIs) policy, drifting away from current rules and particularly European Commission supervision. Gerardo Fortuna has the story.
Agriculture Commissioner throws his weight behind carbon farming
EU agriculture chief Janusz Wojciechowski has promised to do his best to place carbon farming front and centre of member states’ Common agriculture policy (CAP) strategic plans amid concerns that nice words will not translate into action. Natasha Foote has more.
French CAP plan prioritises legumes, hedges and carbon farming
France’s national strategic plan for the Common Agriculture Policy (CAP), submitted to the European Commission at the end of 2021, prioritises legume production, hedges, and carbon farming planting. While some find this “acceptable”, others see it as a “national strategic disappointment”. EURACTIV France reports.
Germany’s pesticide rules have major shortcomings – report
Germany’s legal framework for using plant protection products has significant shortcomings, the conclusions of a report presented on Wednesday (12 January) by an alliance of various associations shows. EURACTIV Germany reports.
In case you missed it
2022: CAP, Farm to Fork and other gifts that keep on giving
After an action-packed 2021 that kept the agrifood sector busy with the last crumbles of the Common Agricultural Policy (CAP) reform, there are still some crucial dossiers in store for 2022, from the adoption of the national strategic plans to the review of the sustainable use of pesticides directive. EURACTIV’s agrifood team has you covered.
Nine member states including Germany missed first CAP deadline
One-third of the 27 EU countries missed the official deadline for submitting their national strategic plans under the Common Agricultural Policy (CAP), including Germany and Belgium, a European Commission source confirmed to EURACTIV.
News from the bubble
AGRIFISH Council: The first Agriculture and Fisheries Council meeting of the French presidency will take place on Monday (17 January) from 10am in Brussels. The meeting will be chaired for the first time by the French Minister for Agriculture and Food, Julien Denormandie, who will outline the French presidency’s priorities, namely reciprocity on trade, pesticide use and carbon farming. Ministers will also hold an exchange of views on the market situation with regard to agricultural products with a particular focus on issues in the pigmeat sector; the impact on agriculture of rising energy, fertiliser and feed costs; the closure of HORECA businesses due to COVID restrictions; and veterinary diseases such as African swine fever and avian influenza.
Short sellers swoop on Beyond Meat: Beyond Meat has become one of the most shorted companies on the US stock market as scepticism grows over the plant-based meat boom, according to the Financial Times.
Commissioner for Animal Welfare? This week, 118 members of the European Parliament tabled an oral question to have a Commissioner explicitly in charge of Animal Welfare, i.e. to make the Commissioner’s official title “Health, Food Safety and Animal Welfare”. Meanwhile, a survey conducted in June by Ipsos shows that 70% of Europeans think there should be an EU Commissioner for Animal Welfare. Asked as to whether the Commission would consider such a possibility, a Commission spokesperson was non-committal but instead reiterated its commitment to animal welfare as a key focus.
New faces in new places: FoodDrinkEurope has announced the appointment of Dirk Jacob as its new Director General, effective from 1 January 2022. He takes over from Mella Frewen, who stepped down after almost 15 years in the role.
Commissioner travels to Spain: Commissioner Wojciechowski was on the island of La Palma this week to evaluate the situation and assess the impact on the agricultural sector after the volcano eruption. He visited farms affected by the eruption and also had lunch with Spanish agriculture minister Luis Planas, before giving a joint press conference where they discussed Spain’s CAP national strategic plan, as well as the boom in fertiliser prices.
Agri-trade remains strong: The latest figures on the EU agri-food trade show an increase of 6.1% reaching €239.5 billion worth of total exports and imports for the period from January to September 2021, according to the latest EU agri-food trade figures.
Europe’s disap-pear-ing stock: The latest figures released by the World Apple and Pear Association (WAPA) confirm a new record low in 2021 (-27% compared to 2020) for the European pear stocks. Remarkably low are the stock figures for Italy (-74.9%), Czechia (45.5%), and France (-44.3%). Loss of surface areas, as well as the stink bug and drought, are among the causes of the decreasing trend.
IN-PACT: In the context of the European Green Deal and the Farm to Fork Strategy, the Joint Research Centre (JRC) is launching the IN-PACT questionnaire to assess to what extent businesses in the agri-food chain are innovating products and practices to move towards more sustainable food production and marketing, how this is happening, what are the drivers and barriers, and to what extent regulation is needed. Learn more.
Have your say: The European Commission is inviting all interested parties to comment on proposed revised state aid rules for the agricultural, forestry and fishery sectors. The purpose of the proposed revision is to align the current rules with the current EU strategic priorities, in particular the Common Agricultural Policy (CAP), the Common Fisheries Policy (CFP), as well as to the European Green Deal. Member States and other interested parties can respond to the consultation until 13 March 2022.
Agrifood news from the Capitals
Conservative MEPs slam Germany over its delayed CAP Strategic Plan. The lag in submitting the national plan, meant to implement the EU’s reformed Common Agricultural Policy (CAP) on a national level, reveals a “failed start” for the country’s new administration, the five German lawmakers said in a joint statement. After coming into office in early December Germany’s new “traffic light” government had failed to submit the plan to the European Commission by the deadline on 1 January. The group of parliamentarians, including head of the agriculture committee Norbert Lins and CAP Strategic Plans rapporteur Peter Jahr, called the delay “incomprehensible”, adding that it would bring further “insecurity” for farmers’ planning. (Julia Dahm | EURACTIV.DE)
Five NGOs sue French state over pesticides. The associations accuse the State of failing its obligations to protect biodiversity by continuing to authorise controversial pesticides. They filed an appeal with the Paris Court of justice on Monday (10 January), seeking recognition of the State’s fault in the “sixth mass extinction”. France is currently considering a new re-authorisation of neonicotinoids – pesticides more widely termed as “bee killers” – for its beetroot sector. The government also appears in favour of the re-authorisation of glyphosate, a highly controversial pesticide, on the European level. (Magdalena Pistorius | EURACTIV.FR)
Favourite brands face a price hike. Supermarkets have warned that prices on top brands such as Nutella, Lipton and Coca-Cola will increase following annual price negotiations with major manufacturers, according to the Bulletin. “Historically, the negotiations have never been so difficult,” said Roel Dekelver of Delhaize, while Hanne Poppe of Colruyt agreed that this time the talks are “very tough”, and discount stores Lidl and Aldi echoed the sentiment. (Natasha Foote | EURACTIV.com)
UK-Australia trade under scrutiny. The UK Trade and Agriculture Commission (TAC) has been exploring whether provisions in the UK-Australia FTA that relate to trade in agricultural products may affect the maintenance of UK regulatory standards on animal or plant life or health, animal welfare and environmental protection this week. The deal has proved controversial in the farming community, where there have been fears that farmers will be sold out in the trade deal. (Natasha Foote | EURACTIV.com)
Turning nice words into action. How has Ireland used the flexibility of the CAP legal framework post-2022 to design a fairer CAP Strategic Plan? A new policy analysis, researched and written by Matteo Metta for the Left group in the European Parliament (GUE), assesses fairness in Ireland’s CAP submission. Check it out on ARC2020. (Natasha Foote | EURACTIV.com)
Syngenta against Italy’s anti-takeover rules. Chinese-owned agrochemicals company Syngenta appealed against Italy’s government decision that blocked its attempt to take over an Italian vegetable seed producer Verisem, Reuters reported. The executive is empowered with a so-called ‘golden power’ legislation aimed at defending strategic assets in the country against Chinese corporate bids. The takeover was blocked by the government last October amid concern that the acquisition would have shifted to Asia the strategic control of seeds. (Gerardo Fortuna | EURACTIV.com)
Commission has huge task ahead. Spain’s agriculture minister Luis Planas has said that the country’s strategic plan is 4492 pages long and “full of arguments, ideas, proposals and data.” This has led some to claim that this is a well-known tactic used to “flood” the Commission with information so it has no chance to critically check it for substance. Natasha Foote | EURACTIV.com)
Ominous data for the Greek apple market. Despite the generally optimistic figures for European apple production coming from Eurostat and World Apple and Pear Association (WAPA), Greek production is forecast to fall by 28% in comparison to last year’s levels. The average packing price based on preliminary data for Greece, which is the price after sorting and packing, reached €91.97 in the first week of December – a decrease compared to the corresponding prices in September. (Georgia Evangelia Karagianni| EURACTIV.gr)
Big year ahead for Polish agriculture. The sector will face a number of changes in 2022 that will have a positive impact not only on the daily work of food producers, but also on a better condition of the natural environment, according to the head of the ministry of agriculture, Henryk Kowalczyk. For example, the regulation on the construction of storage reservoirs on farms is set to be concluded any day now, meaning farmers will be able to count on financial support from the state in the form of a subsidy of 15,000 PLN (€3.305). Moreover, Legislative work will also be carried out on the use of renewable energy sources in agriculture. (Kamila Wilczyńska | EURACTIV.pl)
Slovak strategic plan fails on biodiversity, scientists warn. Environmentalists from the European Society of Scientists and Experts on Nature Conservation (ESSENCE) are demanding stricter rules for Slovak farmers in order to improve the protection of wildlife farmlands. According to them, the CAP Strategic Plan proposal prepared by the Ministry of Agriculture is insufficient to counteract declining biodiversity. In a joint statement, they blame proposed design of the eco-schemes. “It is not unthinkable that at a time of deepening biodiversity crisis, the use of eco-schemes should depend only on the voluntary (non) interest of farmers,” they say, calling for all activities proposed for eco-schemes to move to the enhanced conditionalities which every farmer must fulfil in order to receive direct payments. The ministry announced last week that it wants to submit the strategic plan to the European Commission by the end of January at the latest. The document has yet to be approved by the government. (Marián Koreň | EURACTIV.sk)
First criticism on National Strategic Plan. Croatian agricultural minister Marija Vučković reported that Croatia had sent its CAP national strategic plan, worth just over €3.4 billion, to the European Commission on 5 January, which elaborates in more detail what was set out in the draft strategy for agricultural development and defined by the guidelines of the Common Agricultural Policy (CAP). The Croatian Karstic Pastures Association expressed dissatisfaction with the Strategic Plan of the Ministry of Agriculture, explaining that it deprives farmers of 90% of aid, endangers their survival, and requested a plan that will encourage increased agricultural production and reduced taxes. “Making the farm sector more competitive and more productive cannot be achieved with investments in development as low as these,” the association said, adding that it “questionable” that the planned amount of investments can help achieve the targets of the strategic plan for the period 2023-2027. (Željko Trkanjec, Euractiv.hr) (Željko Trkanjec | EURACTIV.hr)
Sector continues to suffer from bird flu outbreaks. Denmark has had to cull thousands of poultry infected with bird flu. Around 100,000 hens at Stoholm in Central Jutland have been affected by bird flu, according to a statement from the Danish Food Safety Authority. This is the third time that the Danish authorities have had to resort to culling poultry in the past year. (Natasha Foote | EURACTIV.com)
17 January | AGRIFISH Council meeting
20 January | 8th German-African Agribusiness Forum