The near and medium-term prospects for European agriculture are not good.
“I think we’re going through historical change,” said Ramón Armengol, president of Cogeca. “We’re seeing the first effects of the war and climate change.”
Across Europe, agricultural production is down, while farmers are being hit with the triple whammy of drought, market disruption caused by the war in Ukraine, and Green Deal regulation.
That was the general message from the Copa-Cogeca, the EU’s largest farming organisation at a press conference on May 2, given by Christine Lambert, president of Copa.
Armengol said that recent drops in prices on fertiliser and energy are giving farmers greater margins, but overall, European agriculture production is down, particularly fruit, vegetables, beef, and lamb, a drop caused by high production costs and low prices.
Last year, 46% of the EU was affected by drought. The prospect of drought drying up most of the harvest on the Iberian Peninsula looms large this year also, as the persistent lack of rain is predicted to take 50% to 80% of the harvest.
“There’s a feeling that this has never been seen before,” Armengol, who is Spanish, said of the situation in Spain and Portugal. “There is not a drop of hope in Spain.”
The effects of Russia’s invasion of Ukraine have been felt not only in the spike in fertiliser prices but also in the influx of Ukrainian agricultural products, particularly wheat, legumes, and eggs into the bloc, deeply affecting farmers in the countries bordering Ukraine.
Armengol said there has been an 88% surge of Ukrainian products in the EU, mostly in cereals and eggs, which has increased by over 200%.
“We need controls and infrastructure” to cope with the situation, he said.
The EU lifted tariffs and quota restrictions on Ukrainian products last May, creating “solidarity lanes” in the hope of facilitating the flow of Ukrainian agricultural products over land through Europe since Russia had blockaded the Black Sea, Ukraine’s primary trade route. Ukrainian wheat and eggs were to pass through the EU to Africa and Asia, but land transportation has been too slow, leading to the demise of local prices in Poland and other countries that border Ukraine.
Lambert, president of Copa, said that a Romanian colleague had sent a video showing trucks lined up in a long traffic jam.
“There’s an excess in Poland and a famine in Mali,” Lambert lamented.
Both Armengol and Lambert were critical of the European Commission’s slow response to the situation with Ukrainian products getting stockpiled just this side of the Ukrainian border and depressing prices for eastern European farms, which they said they had been sounding the alarm on since last year.
“Another aspect is that we can’t take unilateral measures,” Armengol said. “The commission has to take leadership and lead the way back to normalcy in markets.”
“Imports without rights, well, there will be consequences,” Lambert said. “The commission needs to support and take on this solidarity.”
The commission reached an agreement late last week with four countries bordering Ukraine that had unilaterally blocked Ukrainian agriculture imports. Poland, Hungary, Slovakia, and Bulgaria agreed to let Ukrainian agricultural products in after the commission promised “exceptional” safeguard measures for Ukraine’s wheat, maize, rapeseed, and sunflower seed, as well as €100 million in aid to farmers from the emergency fund of the Common Agricultural Policy.
Lambert and Armengol said the monetary amount was insufficient to cover the damage to farmers and that corralling the Ukrainian products would require much stricter controls and better infrastructure.
Armengol also said that, though tapping into the emergency fund to address the problem “was a smooth mechanism for the Commission,” what is needed is “functional investments into the EU single market because the crisis fund is never enough.”
“We see multiple crises now and the crisis reserve is too low,” he added.
Spain and Portugal have also requested assistance from the emergency fund for the drought, with France supporting their call for help.
Armengol said that Spain was looking for more flexibility in conforming to the EU’s eco-schemes that are part of CAP (EU’s Common Agricultural Policy) and that the country needed to invest in its water infrastructure to address the increasingly arid conditions on the Iberian Peninsula. In Eastern Europe, the infrastructure needs would depend on the outcome of the Ukrainian invasion, Lambert said, noting that much depends on whether Ukraine will be able to access the Black Sea freely again. If Russia retains control of the Black Sea, better overland trade routes for Ukrainian products would have to be developed.
“They-re using lorries, which isn’t very straightforward,” she said.
When asked about the prospect of Ukraine entering the EU, both agreed that it was the right and inevitable course, but that it would also have severe consequences for the agricultural sector that would need years to work out before letting the country into the common market. Ukraine is not only a huge agricultural producer but also currently has many practices and regulations that differ from those of the EU. Some agricultural sectors will be more sensitive than others, but farmers cannot be expected to “bear it alone,” Armengol said of the changes in the market a Ukraine member state would cause.
The pair also said that farmers were being overwhelmed by the Green Deal regulations coming down from Brussels and the vast changes they impose on the sector. Armengol specifically mentioned updates on animal welfare regulations related to transport and slaughtering.
“There is an endless string of reform when it comes to animal transporting and slaughtering,” he said. “We would have to leave livestock raising to third-party countries.”
He said the commission’s proposal would affect “every part of the chain” and require investments the sector would not be able to make a return on.
Lambert also cited proposals related to soil health, pesticides, nature restoration, industrial pollution, and Natura 2000 areas, and said the commission was “elusive” and difficult to dialogue with. She complained that much of the competency in the areas related to agriculture had been taken out of the hands of the Agricultural Directorate and placed under the Health and Food Safety Directorate. She also said that impact assessments were either delayed or lacking for some proposals.
“They probably didn’t do the impact assessment because they knew it would cost a lot,” she said of the nature restoration directive.
She also cited the incongruence of allowing into the EU Ukrainian products grown with pesticides that are now illegal for use within the block.
“How can we explain to farmers that the EU is taking a decision that results in the lowering of production in the EU and bringing in more products from third countries? We know that they don’t follow the same rules. Our leaders need to wake up and smell the coffee,” she said, contrasting the tighter restrictions Brussels is placing on European farmers while seeking trade agreements with countries with different standards.
The EU has trade agreements pending with the Mercosur bloc, as well as Australia and New Zealand.
“We’re already seeing lower yields,” Lambert said of European crops, and farmers fear more pesticides may be prohibited before an adequate replacement is found. She emphasised that research into alternative and organic pesticides was important and needed to be sped up.
Overall, she summarised, Brussels had set its sights on farming as key to achieving the goals of the Green Deal but the slew of regulations coming down will undermine much of the continent’s current production and cause many small farms to close.
“In the EU, we’ve been talking about greening, greening, greening, and we haven’t been talking about production,” she said.
She called on EU leaders to dialogue with farmers in crafting regulations and not to sacrifice the farming sector in trade agreements.
Spanish President Pedro Sánchez has pledged to bring the long-pending trade agreement between the EU and Mercosur—the South American block of Brazil, Uruguay, Paraguay, and Argentina—to a close during his upcoming EU presidency. Lambert noted that creating a level playing field for European farmers against that economic and agricultural giant with very different regulations will be difficult and that farmers may again be the sacrificial lamb.
“Once again agriculture is the adjustment variable to sell cars,” she said. “No, we no longer want to be the adjustment variable.”
But Armengol was doubtful Sánchez could fulfil his promise.
“It seems to be quite ambitious,” he said. “I don’t think it will be cleared this year.”
Armengol said he did hope that a new directive to permit growing GMO crops in the EU would go through under Sánchez’s leadership.
That, too, would be historic.
