Now to build a strategy for ag around EU vision

In this week’s paper, we carry extensive analysis of the Farm to Fork and Biodiversity strategies published by the European Commission on Wednesday. The documents lack precise detail, many of the stated objectives seem contradictory and, in the complete absence of any economic modelling, appear totally aspirational.

Those looking to find fault would have no shortage of ammunition – balancing the stated aims of maintaining food affordability while ramping up organic food production being an obvious starting point.

But despite obvious faults and the legitimate concerns some of the proposals will cause farmers, we should avoid the default position of merely expressing rage and instead look to engage. The proposals have some positive aspirations.

At this point, both the Farm to Fork and Biodiversity strategies merely outline the objectives of the Commission for agriculture, the environment, climate and society as a whole for the coming decades.

The fact that both reports lack detail should be seen as giving farmers and national governments scope to shape the implementation of the strategy.

This provides a strong foundation on which farmers should demand all additional measures are built

It is critical that we seize this opportunity and present coherent policy positions to the Commission that will deliver on the objectives while protecting farm incomes.

In the Farm to Fork strategy, it is recognised at the outset that shifting to a sustainable food system will only be successful if it delivers a sustainable livelihood for the primary producer.

This provides a strong foundation on which farmers should demand all additional measures are built.

In a significant development, the Commission acknowledges the role of agriculture and forestry in the sequestration of carbon from the atmosphere.

This appears to support the view that the contribution of agriculture to national emissions should be based on net emissions and not gross emissions which ignore the ability of farmland to sequester carbon.

A proposed consumption tax on food that recognises greenhouse gas emissions and environmental impact is also identified

It goes on to recommend that farm practices that remove carbon from the atmosphere should be financially supported. This might be done either though the CAP and/or through the introduction of a certificate scheme to allow companies pay farmers for carbon sequestration. A proposed consumption tax on food that recognises greenhouse gas emissions and environmental impact is also identified.

On both fronts the concepts are solid, provided the implementation plan is robust. Ireland must ensure the model used to calculate a consumption tax is applied equally to all food products produced within member states and those imported into the EU. It must also take account of the full product life cycle, with any tax ring-fenced for re-investment within the agricultural sector.

There is also a strong commitment to ensure full implementation and enforcement of EU sustainability standards within bilateral trade deals

The carbon credit scheme recently put forward by Bord Bia will be critical in ensuring the low carbon footprint of Irish dairy and beef is given credit in any future taxation model.

There is also a strong commitment to ensure full implementation and enforcement of EU sustainability standards within bilateral trade deals.

Legislative proposals will be presented in 2021 aimed at preventing products associated with deforestation entering the EU market. If enforced, such measures would restrict Brazilian beef imports.

As reported previously in the Irish Farmers Journal, the biodiversity strategy outlines the intention to significantly reduce pesticide and fertiliser use on farms. It presents a serious threat to the tillage sector and could drastically reduce productivity of our grassland. But within the report there is an acknowledgement that biotechnology and the development of bio-based products have a role to play in increasing sustainability.

The Commission is also understood to be carrying out a study into the potential of new genomic technologies to improve sustainability.

The acceptance of these technologies would help reduce reliance on pesticides and potentially reduce reliance on chemical nitrogen within grassland. The report also contains a suggestion of re-coupling supports in a bid to stem the flow of money to those “who merely own farmland”.

Raging against the report will no doubt slow down progress but will it change the end destination? History would suggest not. Would farmers be better served by taking the broad policy direction from Brussels and engaging with national government and key stakeholders to formulate a strategic plan for Ireland.

A plan that reflects the reprioritisation of farm incomes, the reorientation of CAP, an openness to new approaches to below-cost selling and biotechnology and a repositioning of agriculture within the greenhouse gas debate.

UK ups the ante in trade talks with EU

After three rounds of talks between the EU and UK on a future trading relationship, to take effect from the beginning of 2021, there is stalemate.

On the basis of discussions so far, there isn’t sufficient common ground for a trade deal. The UK wants to retain maximum access to the single market of the EU 27 but with the autonomy to make its own separate trade deals and set its own customs and standards, independent of the EU. For its part, the EU won’t countenance a major economic power operating on its doorstep, cherry-picking the best parts of EU membership without the obligations attached.

This week the UK announced the tariff policy it intends to pursue from the start of next year. In a reversal of previous policy, it has decided to apply full WTO tariffs on agricultural produce and cars. While a similar response from the EU is the default setting in the event of no-deal, the timing of this announcement ahead of the last round of talks is a reminder to Ireland and Germany just how exposed they are in the event of trading on WTO terms with the UK.

For beef, it would be Armageddon

Ireland exports two-thirds of its cheddar, more than half its poultry and pigmeat exports and 250,000t of beef, just under half of total exports, to the UK. Application of full WTO tariffs would have a serious impact on every sector of Irish agriculture. In time, dairy, poultry, pigmeat and sheepmeat can probably develop alternative markets given that they are competitively priced in global markets and the EU 27 has a deficit of sheepmeat.

For beef, it would be Armageddon. There is nowhere else that Ireland can sell 250,000t of beef and that is before we consider the negative impact COVID-19 will have on beef markets.

Minister Creed estimated early last year that a Brexit on WTO terms could cost Irish agriculture €1.7bn and that was at a time of favourable global economic trading conditions. In current trading conditions it is difficult to quantify this, but it is higher – it is just a question of how much.

Of course there is still time for an agreement and it has been observed that this announcement reveals that the UK has learned to negotiate. Irish farmers desperately need a successful outcome to the negotiation.

Huge efforts to reduce emissions

Inside this week’s paper you will find a copy of our 2020 Agribusiness report, produced by the Irish Farmers Journal in conjunction with our partners, KPMG.

The theme of this year’s report is sustainability and it looks at just some of the enormous changes and research taking place in farming and the food industry to lower carbon emissions, reduce the environmental impact of food production, improve farm incomes and transition to renewable energy sources.

The industry only needs time to meet its commitments

All too often, the narrative around agriculture’s impact on the environment and the climate is negative. Yet as our report clearly shows, there are enormous positives taking place in Irish farms and food businesses. The industry only needs time to meet its commitments.

On Thursday morning we launch our 2020 Agribusiness Report via a live webinar with contributions from industry leaders in Ireland and abroad. It can be accessed by emailing events@farmersjournal.ie

I hope you can join us for the debate.