Depending on the production and consumption structure, the envisaged implementation of the Green Deal may lead to a highly asymmetric distribution of costs and benefits between EU countries as well as within agriculture between livestock and crop producers.
Agricultural production in the EU will decline significantly if the Farm-to-Fork strategy is fully implemented, especially in animal husbandry. The targeted climate effects will also not be achieved. Nevertheless, the F2F strategy has potential to benefit agriculture and society. Higher organic outputs imply potential demand and thus higher incomes for farmers. These are findings of the impact assessment study published today by Christian-Albrechts-Universität zu Kiel (CAU).
For cereals, oilseeds and beef, the reduction amounts to about 20 percent each, the Grain Club reports. The decline in livestock numbers is even greater. In the case of cattle, by 45% and in the case of dairy cows, by 13.3%, while the decreases in acreage for cereals and oilseeds amount to only 2.6% and 6% respectively. This was accompanied by price increases for agricultural products in the European Union (EU), including almost 60 percent for beef, about 50 percent for pork, more than 30 percent for raw milk, and between 10 and 20 percent for fruits and vegetables, oilseeds and cereals. This is the conclusion of an impact assessment study
published today by Prof. Dr. Dr. Christian Henning, Institute for Agricultural Policy and Agricultural Economics at Kiel University, on behalf of the Grain Club alliance of associations and other associations.
CO2 savings of the agricultural industry are leveled out
Study leader Henning explains: "Although the package of measures increases ecosystem services in the EU, it does not yet achieve the intended positive effect on the climate worldwide. The projected greenhouse gas (GHG) savings from a reduction in European agricultural production are completely leveled out by an increase in GHG emissions from agriculture outside the EU, as well as land use change in the EU."
„A win-win situation for society as a whole is possible, but requires smart innovative implementation by policymakers.“
Other individual farm-to-fork measures aimed at blanket support for specific production techniques - such as "organic farming" under EU guidelines - are not cost-effective, Henning said. There are other measures that can generate more ecosystem services at lower cost, he said. In addition, depending on the production and consumption structure, the targeted implementation would result in a highly asymmetrical distribution of costs and benefits between EU countries, as well as within agriculture between livestock and crop producers. Nevertheless, there could be opportunities for all sides.
Consumers cost 10% of their per capita income
For example, full farm-to-fork measures increased ecosystem services, such as water and climate protection, in all EU member states, and at the same time could actually increase EU farm income by up to €35 billion annually, according to the study. "From a consumer perspective, the Green Deal is worth it as long as the benefit value of increased climate and water protection and increased biodiversity is higher than the adaptation costs of €157 per capita per year," Henning continues. The calculated adaptation cost of €157 is equivalent to 0.3 percent of per capita income in the EU. In fact, the study estimates that EU consumers would pay up to 10 percent of their per capita income for the entire implementation of the Green Deal targets. This implies a potential demand for agricultural ecosystem services of about €320 billion, or €715 per capita per year. However, according to the study, this potential is not yet fully realized in the current implementation of the farm-to-fork strategy.
Market alone sets wrong incentives
"In principle, the farm-to-fork strategy holds potential for farmers and society as a whole. However, this requires innovative agricultural policy implementation. A bureaucratic specification of specific technologies is not conducive to achieving the goal, as this blocks entrepreneurial incentives or sets the wrong ones. Conversely, the market alone also leads to the wrong incentives, since important ecosystem services such as water and climate protection cannot be adequately rewarded via the market. We need policy governance mechanisms that translate societal needs into correct incentives for farmers. At the same time, incentives should also be created on the consumer side to consume sustainable and healthy food without excessive waste," concludes study director Henning.