Impact assessments on Farm to Fork strategy

The EU Farm to Fork strategy represents the biggest change to agricultural policy in the history of the European Union.

For the first time, a plan has been put in place that will reduce the production capacity of EU farms, particularly those in the livestock sector.

This has been decided without a full impact assessment being carried out, though the EU’s Joint Research Council (JRC) has conducted a partial assessment and further studies have been carried out by the USDA’s Economic Research Service (ERS) and Wageningen University and Research (WUR).

While not related to Farm to Fork, the “Tightening the Net” report by Oxfam points out the use of land to capture carbon emissions “could also lead to an explosion in demand for land which, if not subject to careful safeguards, might risk increasing hunger and fuelling land inequality.”

This work was published in August 2021 and uses the Common Agricultural Policy Regionalised Impact Analysis (CAPRI) modelling system for the study. It limits its assessment to the reduction in pesticide use by 50%, a 20% reduction in fertiliser use, having 25% of EU land in organic production and an increase in the use of landscape features.

Main findings

The report identifies that the reduction in pesticides will bring a saving but it will increase other costs such as mechanical weeding by as much as 50%. It also estimates an average yield loss of 10% that could rise as high as 50% in arable and permanent crops.

Allocation of 10% of land to landscape features would mean a reduction in cereals area of 4% and a fall of 15% in cereals production, leading to a 26% reduction in tillage farm incomes.

With organic production, the elimination of pesticide and fertiliser costs would cause a 100% increase in fuel and service costs for the alternative farming practices that would be required. On output, the report estimates that there would be a 45% reduction in cereals yield and large reduction in fruit and vegetable outputs as well.

On beef, the report estimated a 15% reduction in supply but a corresponding 24% increase in price which would more than double farm incomes. Pigmeat prices are estimated to increase by 43%, with a 129% increase in farm incomes, and poultry meat prices by 18% and 83% increase in farm incomes.

Dairy output is forecast to fall by 10% and price to increase by 2% which isn’t enough to prevent a revenue loss of just under €5,000 per farm.

Sheepmeat prices are forecast to increase by 19%. The report found that the measures would deliver a 20.1% resuctions in EU emissions but 14.8% of this would be transferred to the rest of the world.

The study deals only with the market and production consequences of reducing fertiliser use by 20%, pesticide use by 50% and antibiotics by 50%, plus the removal of 10% of farmland from agricultural use.

Organic farming, reduction of food waste and EU mitigation measures are excluded from the analysis. The USDA examined the impact under three different scenarios, the first being the measures applied to the EU only, the second had EU trading partners added and the third is based on applying the measures to the entire world.

In the first EU-only scenario, it estimates that production would fall by 12% leading to produce price increases of 17%.

Imports are forecast to increase by 2% but there would be a dramatic 20% drop in EU exports to the rest of the world.

It would cause a 16% drop in gross farm incomes but would have no impact on EU food security, though the reduction in EU exports would increase food insecurity for 22m people in poorer countries, mainly in Africa and Asia.

The second scenario applies the measures to the EU, plus the trading partners that the EU imports from. This would cut production by 11% but the effect of this when applied to the EU, plus the trading partners, would be to push food prices up 60%.

It would mean that EU imports would decline by 10%, as would exports, but farm incomes would increase by 8%. The impact on global food security would also increase with 103m people exposed, mainly in Africa and Asia.

Moving to the third scenario where the rest of the world adopted the rescued pesticide, fertiliser and antibiotics, as well as setting aside 10% of land from production, the impact increases further.

While food production in the EU would fall 7%, globally the USDA estimate it would fall by 11%. This would increase EU prices by 53% but non-EU prices by a huge 89%. This would give farm incomes a boost of 15% in the EU and 17% outside the EU, but at the cost of pushing 185m people into greater food insecurity.

A similar point was made in Oxfam’s “Tightening the Net” report. It warned that corporations offsetting their emissions by using “vast swathes of land in low income countries” could increase hunger.

Wageningen University and Research in the Netherlands published two studies, on the livestock sector and sustainable crop production.

Wageningen forecasts a reduction of 10% to 15% in livestock production across the EU by 2030 if the targets set out in the Green Deal are to be achieved. This decrease, Dr Jongeneel said, will be driven mainly by the requirement to halve agricultural nutrient losses, lower livestock manure production and herd size.

The Dutch scientists also analysed the impact of this reduced production on farm incomes.

Most notably, they predict that average income for the EU’s dairy farmers will fall by 32%.

While analysis differed across the various regions of the EU, Dr Jongeneel said that this figure would likely be typical for intensive dairy production systems.

One of the factors influencing farm profitability will be rising feed costs. Wageningen researchers found that a reduction in pesticide use will negatively impact feed volume and quality and in doing so, negatively impact livestock margins.

Dr Roel Jongeneel found that in some, less intensive systems, incomes may increase during the lifetime of Farm to Fork due to increases in food prices associated with a reduced supply. He said this will depend on the distribution of higher food costs paid by the consumer back to the primary producer.

Crop production

On sustainable crop production, Wageningen’s second report forecasts decreasing tillage production due to EU farm policy.

This study analysed Farm to Fork’s impact on 10 crops in seven countries across the EU. Crops grown in Ireland including wheat, maize and sugar beet were studied.

Modelling the impact of a reduction in pesticide and nutrient use, along with the added objective to have more land with high-diversity landscape features, Dr Jongeneel said wheat yields will decrease by as much as 15% and 11% in Germany and France, respectively, and that yields in Romania could fall by up to 25%.

Responding to the Wageningen analysis, Tassos Haniotis of the European Commission said member states’ CAP strategic plans will have an important role in mitigating the impact of climate measures on farm incomes.

The consistent element of each of the studies is a loss of production wherever the Farm to Fork measures are applied. When applied to the EU alone, this loss of production will also lead to an increase in prices but according to USDA not enough to offset the loss of production. The EU JRC has a much more positive view on product price increases but as they, along with the other studies, haven’t factored in the impact of UK trade agreements, this could be optimistic.

The European Commission has countered the findings by pointing out that pesticide sales have fallen by 7% since 2011, EU value added has increased by 19% and trade balance has grown by 10% annually. It also says that climate change and biodiversity loss are costing, with 50% of EU land cultivated with crops having a pollination deficit and droughts are costing €9bn per year. The EU points to CAP mitigation measures and diet change. The use of CAP money to fund the loss is a dramatic change of EU policy and while there is validity in the EU observations, the reality is that Farm to Fork will mean less production, less revenue and more expensive food, leading to greater insecurity for people in poorer regions of the world.