Home Impact producer EU agricultural policy could significantly affect international trade

EU agricultural policy could significantly affect international trade

4
0

Global exporters and importers have warned they will face significant adjustments if proposed policies are implemented

Two EU agricultural reform proposals will shake up world grain markets, according to an EU grain trade association.

Coceral general secretary Iliana Axiotiades said the EU biodiversity strategy and the farm-to-fork strategy are two disasters waiting to happen.

“These are going to have a huge impact on European production,” she said during a webinar hosted by the International Grains Council.

The biodiversity strategy aims to transform 10 percent of the EU’s agricultural land into a highly diverse landscape.

“It goes a little further than fallowing and 10% is a lot,” said Axiotiades.

The Farm to Fork strategy includes 27 actions designed to make the EU food system more environmentally friendly by 2030. They include increasing organic land from 8% to 25%, reducing 20% fertilizer use and 50% reduction in pesticide use.

Coceral estimates that this will lead to a drop of 19 million tonnes in the EU’s annual wheat production by 2030.

It will also lead to a drop of nine million tonnes in corn production, a reduction of 12 million tonnes of barley and other grains and a reduction of 4.7 million tonnes of oilseed production.

Axiotiades said studies by the US Department of Agriculture, the European Commission’s Joint Research Center and several European universities came to similar conclusions.

This loss of production will have profound impacts on global trade in the world’s major crops.

The EU exports 42.9 million tonnes of cereals per year, including 27.4 million tonnes of wheat and 10.6 million tonnes of barley. It imports 21 million tonnes of cereals, including 14.5 million tonnes of maize.

If the proposals are implemented, Coceral estimates that the EU will go from a baseline scenario of a net exporter of 17.6 million tonnes of grain by 2030 to a net importer of 35.6 million tonnes.

It would be a seismic turning point in the EU grain trade that would have profound repercussions on world markets, she said.

The impact on the oilseed market is expected to be more moderate, although still significant.

The EU is now a net importer of 21.6 million tonnes of oilseeds. By 2030, it is expected to import approximately the same volume in the Reference Case. If the proposals are implemented, this will increase to 26.9 million tonnes.

Axiotiades said the proposals are well-intentioned but the approach is wrong.

“We need to do things more carefully with a longer transition period,” she said.

Gord Kurbis, vice-president of trade policy and crop protection at the Canadian Grain Council, asked him to what extent the unintended consequences of policies are recognized by politicians in Brussels.

Axiotiades said they appear to be listening to what farm groups like Coceral are saying.

When the farm-to-fork policy was first announced it was touted as a done deal, but lately politicians have suggested it was just a vision.

She noted that the policies are at the start of a long process that can take two to three years before implementation. However, she warned that they will have ripple effects around the world due to the so-called Carbon Border Adjustment Mechanism contained in the EU Green Agreement.

“Exporting countries are also going to have to adjust their production methods if they want to sell in the EU,” Axiotiades said. “They have to align if they want to continue to access this market.”

This will have a significant impact on the availability of cereals in the EU, which is why Axiotiades encourages exporting and importing countries to make presentations to the European Parliament through their embassies in Brussels.

“We need to have a global conversation about these things,” she said.

She noted that a shift to more sustainable production is inevitable in the EU, but there is still time to influence what this change looks like and how quickly it is happening.


Source link