How to fix European farming

How to fix European farming

Milk wars, free trade, red tape and ‘green’ rules — experts and insiders offer solutions to Europe’s farming headaches.

By POLITICO

A perfect storm: That’s how policymakers, farmers and the companies catering to them describe this moment in European agriculture.

The 2014 Russian food-import ban cut access to a major export market for many European producers. The end of milk quotas in 2015 flung dairy farmers into a ruinous cycle of overproduction, making milk cheaper than bottled water in some places. Livestock farmers think they’re next in line, if free trade deals expose them to competition from agricultural heavyweights in the U.S. and Mercosur.

Add to this cocktail a byzantine agricultural policy — where subsidy-paying bodies and farmers both struggle to file the correct paperwork — and the growing but pricey expectation that farming needs to be greener. Farmers are clamoring for more money, but the EU has refugees to think about too. The sector needs action now, but EU rules take years to rework.

Don’t throw money at the problem

Faustine Bas-Defossez is senior policy officer for agriculture and bioenergy at the European Environmental Bureau (EEB).

To eat, we need to farm, and to farm we need a safe and clean environment. Yet the European Union’s Common Agricultural Policy (CAP) encourages socially and environmentally destructive farming practices that precipitate the degradation of our natural resources and threaten the Continent’s ability to produce the food it needs.

Attempts to make the CAP greener have failed. The latest so-called “green” reform allows for environmental payments to maize mono-cultures, the use of pesticides on land set aside for nature protection, and the allocation of CAP public money to farmers who infringe EU waterway protection laws.

Neither has the policy become any fairer: Around 70 percent of CAP payments go to roughly 30 percent of the biggest and most polluting farmers.

Despite receiving 40 percent of the total EU budget every year, the farming sector is in constant crisis. Milk and pork producers struggle in a liberalized market as a result of ridiculously low prices caused by overproduction. Throwing more money at the problem will only worsen conditions for farmers, consumers and the environment. To fix the issue, we need to transition to a truly sustainable farming model.

We need policies that focus on producing quality food, reducing waste, improving diets and shortening supply chains. We need policies that protect farmers, reduce their reliance on dangerous pesticides through ecological farm practices, rebuild soil fertility and, crucially, secure farmers’ livelihoods by sustaining yields over time.

To that end, we must re-evaluate the CAP. Does the policy really deliver on sustainable management of natural resources? Does public money really provide people with good quality, healthy food and offer farmers a decent and stable income?

To get this process started, 115 organizations have called on the European Commission to carry out a “CAP Fitness Check” to answer questions about the policy’s relevance, added value, efficiency, effectiveness and coherence.

Only close scrutiny of the CAP will pave the way toward a more sustainable policy, and in turn a more sustainable food and farming system in the EU.

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Look beyond immediate crisis to long-term challenges

Phil Hogan is European Commissioner for Agriculture and Rural Development.

European agriculture faces serious short-term challenges. We are going through a crisis in certain agricultural markets, especially in dairy and pig meat. But we need to remember to cast our eyes over the horizon. To meet long-term challenges, we will need to innovate, and to monitor, evaluate and modernize our CAP.

Agriculture is not just an economic sector — it is also a social and environmental activity. In the long-run, we therefore need to make sure to continue contributing to jobs in rural areas, and to continue developing these more disadvantaged and rural regions in a balanced and sustainable way.

To “fix farming,” it is of vital importance that producers get a fair price for their product. As the CAP has become more market oriented in recent years, we need to look at new tools to help mitigate risk. We need to consider greater use of mutual funds, insurance and financial instruments, among other measures, and further encourage producers to form producer organizations in order to negotiate fair prices.

We also must ensure processors and retailers do not engage in unfair trading practices at the expense of farmers. I have asked the Agricultural Markets Taskforce to look at these issues in detail and to report to me by year end with concrete suggestions.

Crises are the time for innovation. Let’s act now

Michel Dantin is a French member of the European Parliament, and a member of the committee on agriculture and rural development.

For more than a year, a genuine milk war has ravaged Europe. The first victims have been Europe’s farmers. The crisis won’t end until we take radical action.

Given the current gridlock in the Council over how to solve the overproduction crisis, the European Commission, with the support of the European Parliament, should take responsibility for proposing a credible and binding plan to limit diary production in the EU. Encouraging farmers to retire is one of many measures that can have an immediate effect on the market prices.

EU decision makers must, in the longer run, face up to reality: The current CAP’s founding principles — unchallenged since 1992 — are outdated. The European Commission is the only defender of the World Trade Organization; our main international competitors (the U.S., Brazil, India, China) have already decided to exempt themselves from its rules and strongly subsidize their agriculture sectors.

Investment, sustainability, resilience and, above all, economics, should be at the heart of a new and improved CAP.

This reformed policy should provide tools to foster investments in the farming sector and help EU regions increase their competitiveness. It should set targets for farmers, not lecture them on how they should be achieved.

Finally, the new CAP should protect farmers from the negative effects of price volatility. It should include credible crisis management tools and effective risk management schemes. The risk level on the market is currently so high that farmers and farming organizations can’t deal with it alone.

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Get rid of red tape in farming policy

Pekka Pesonen is secretary-general of COPA & COGECA, which represents 2.3 million farmers and their cooperatives across the EU.

European agriculture is facing one of the worst crises in decades. Producer prices have dropped and input costs are soaring. In recent months, thousands of farmers have protested in Europe.

The market — especially for beef, pork, dairy, fruit and vegetables — is rapidly deteriorating. Pork prices are the lowest they have been in 11 years, and milk prices have dropped 40 percent over a two-year period. Farmers and agriculture cooperatives face serious cash flow problems.

The EU has taken positive steps toward solving short-term problems but we need to take more definitive action.

We need to find new market outlets for our produce, step up promotion campaigns and use export credit insurance to give traders more certainty when they export agricultural produce.

“Europe needs a strong, truly ‘common’ agricultural policy that can better respond to farmers’ concerns and ensure their competitiveness.”
The CAP also urgently needs to be simplified. Red tape stifles innovation. And here we welcome proposals by European Commissioner for Agriculture and Rural Development Phil Hogan to cut red tape, improve the administration of controls and give greater flexibility to member countries.

Greening practices under the CAP also need to become more flexible, in order to respond to varying ecological and climatic conditions across Europe.

We need to improve farmers’ margins in the food chain and combat unfair trading practices with EU legislation. We must pay closer attention to future markets and insurance, particularly in the dairy sector, to help protect farmers against increasing market volatility. We need to step up our efforts on research and innovation, and develop strategies to grow the economy in a green way.

The post-2020 CAP has to ensure the agriculture sector is equipped to respond to future crises. Europe needs a strong, truly “common” agricultural policy that can better respond to farmers’ concerns and ensure their competitiveness.

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Europe needs to embrace, not squash innovation

Jan Huitema is a Dutch member of the European Parliament, and sits on the committee on agriculture and rural development.

People often think that not much changes in European agriculture. This is far from true. Farming is one of the most innovative economic sectors in Europe — think about drones monitoring our crops, waterbeds for cows or innovations in plant breeding. Farmers have the capacity and the knowledge to break new ground, but often find themselves limited by obsolete rules.

European agricultural policy must stop subsidizing an outdated status quo. It should foster creative solutions to lowering costs, improving competitiveness and boosting product differentiation — measures that are good for consumers and farmer alike.

“The first … is to restore farmers’ trust in the EU and include them in the debate.”
Europe’s farming industry needs to produce more and better quality products, ensure food supplies, lower its impact on the environment and improve animal welfare. The first step toward reaching these goals is to restore trust in farmers and make use of their knowledge. Nobody knows their production systems better than they do.

Farmers are made to jump through hoops to get European subsidies, but are not taken seriously in return. They know how to use cutting-edge farming practices — how to fight pests with insects, or make green-fertilizers from waste, for example — but European legislation still stands in their way.

The world is changing fast and so are our agricultural practices. We should be working together and focus on the opportunities these many new innovations can bring.

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Respond with more innovation and better organization

Paolo de Castro is a member of the Group of the Progressive Alliance of Socialists and Democrats in the European Parliament.

The answer to the farming sector’s problems can’t avoid the CAP, the policy that has driven many of the sector’s changes over the last 50 years. And the CAP is at a crossroads. After a reform that should have re-launched agriculture as a pillar of the European project, we face creeping re-nationalization.

We are in the middle of a continental and global oversupply crisis requiring a coordinated European response.

Efforts over the last decade to give the CAP more “market orientation” were good in principle, but exposed farmers to global price volatility. We urgently need to find new policy tools to address a situation that risks jeopardizing the existence of a diverse EU farming sector.

“We need more effective, measurable and environmentally ambitious measures.”
Global food production has become more complex. Agricultural systems across the world have become increasingly interconnected, and farmers are told to operate with greater attention to both environmental and social issues.

Policy makers have tried to respond to these challenges by focusing on rural development and “greening” measures. But implementation increased the burden on farmers and national authorities, and hardly delivered any environmental results. We need more effective, measurable and environmentally ambitious measures.

Innovation and organization are key concepts here. Agriculture is currently one of the industries with the lowest investment rates in research and development, as well as new technology, in Europe. Innovation will depend on changing this mind-set.

Better organization should also be a key long-term objective: It is the only way to overcome the industry’s fragmentation and keep the diversity of the European agriculture alive.

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Invest in strategic thinking

Luc Vernet is co-founder at Farm Europe.

The agricultural sector needs strategic vision, and a well-structured framework for medium- and long-term action. European policy must be coherent and show real ambition to work toward growth and sustainability. It must go far beyond single-minded cost-cutting thinking.

Agriculture is at a crossroads between huge opportunity and massive pressure. Every decision must take a wide range of factors into account: citizens’ expectations, breakthrough technologies and consumption patterns, to name just a few.

At a time when populists target disillusioned farmers by citing agriculture as main concern, the European Union must urgently make agricultural policy its top priority.

“All the big global market players are developing strong policy frameworks to develop their agriculture. Europe must do the same.”
The CAP is of the only policy areas where the European Commission can act as a genuine executive power. It should demonstrate that Europe can be ambitious and still provide real safeguards.

Europe needs to develop tools that match the challenges of our time. From the U.S. to China, New Zealand and Brazil, all the big global market players are developing strong policy frameworks to develop their agriculture.

Europe must do the same, by vigorously investing in agriculture, not only through financial support but with strong strategic thinking.

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Europe needs a circular, less wasteful farming policy

Peter Stevenson is chief policy adviser at Compassion in World Farming.

The myth that we need to produce more food to feed the growing world population is driving the over-industrialization of farming. In truth, we globally already produce enough food to feed 14 billion people. Over half of what we produce is wasted — produce is thrown away, or used as biofuel and animal feed. We do not need to produce more; we simply need to reduce food waste.

Circular economy thinking should be extended to farming. Current farming is highly linear, but circular farming generates its own inputs recycles waste into productive agricultural use.

“The CAP must be replaced by a policy that not only ensures the livelihoods of farmers, but also encourages healthy choices for consumers.”

One way to do this is to move away from wasteful and inhumane industrial livestock production. Over half of EU cereals are fed to animals, and this large demand for cereals has fueled intensive crop production. This in turn encourages the rise of monocultures and agro-chemicals, and leads to water pollution, soil degradation and loss of biodiversity.

We need to change the way we treat livestock. They should be fed on pasture and by-products, or reared in integrated crop-livestock systems where animals are fed on crop residues. Reducing the use of cereals as feed would take the pressure off crop production, restore polluted waters, increase biodiversity, and replenish depleted soil through crop rotations.

The CAP must be replaced by a policy that not only ensures the livelihoods of farmers, but also encourages healthy choices for consumers — thereby lowering  current rates of obesity, heart disease and certain types of cancer — and helps to reduce farming’s carbon footprint.