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This is a transcript of episode fifteen of the Down to Agribusiness podcast. Visit the show page here.


European food and agriculture politics: Reviewing a tumultuous year and looking ahead to 2018

Adam Sharpe
Hello and welcome to the latest edition of the Down to Agribusiness podcast. I'm Adam Sharpe, Publishing Director for IEG Vu and IEG Policy. In this episode, we take stock of what has been a tumultuous year in European food and agriculture politics and look ahead to what is likely to be on the policy agenda in the next twelve months. We will reflect on a number of issues including common agricultural policy reform, the re-authorisation of glyphosate for use in the EU and the sometimes controversial issue of food labeling.

There has been plenty to look back on in 2017. First, I'm joined by my colleagues, Pieter Devuyst and Alessandro Mancosu in the IEG policy Brussels office, to talk about some of the hot topics around European agricultural policy this year. Welcome gentlemen. Let's kick off on CAP reform. The European Commission unveiled its communication on the future of food and farming, which essentially is the document that sets out the broad lines of the EU executive's vision for the CAP after 2020. Peter, one of the key elements emerging from this communication is seemingly a move away from a rule and compliance based systems towards one that is based on performance and results. Would you say that's a fair reflection and which ways is this spelt out in the documents?

Pieter Devuyst
Well, yes Adam, of course this move from rules-based to results-based approach is partly also rhetoric from the commission to giving some reform plans a more positive image because I'm sure there are still plenty of rules and regulations in the new common agriculture policy after 2020. It's true that there will be an increased focus on the results achieved by the member states because the commission is planning to give them more responsibilities. The objectives of the CAP will still be decided at the European level but national and regional authorities will need to select the specific policy measures to reach these targets under so-called strategic plans. The Commission will also review and monitor these plans and then punish member states if they think they didn't achieve sufficient results.

So, the main objective of the proposals is actually to simplify the agricultural policy framework for both administrations and farmers and this simplification has been the top priority of Commissioner Hogan even since he took office. The proposed changes will be the most noticeable for the environmental measures of the CAP because the Commission is planning to get rid of the EU-wide greening requirements that farmers now need to follow to receive their income support.

Adam
This could almost be seen as a mission that greening of the CAP has failed. Certainly as part of the existing direct payment structure anyway. What's the Commission's take on the success of greening and what have others been saying about it?

Pieter
Well, actually since the Commission presented its communication it has been very critical of the greening system that is now in place. Basically, they think that the one size fits all approach that was created with the 2013 reform has not been effective enough in creating environmental benefits and also caused too much bureaucracy for both public authorities and farmers. So, for the Commission now, it doesn't make a lot of sense any more to keep telling all the member states how wide a hedge on a field should be or how many trees a farmer should plant. Also, because the natural conditions are so different within Europe. For instance, between a country such as Finland and Greece. Instead, under the new system, member states will select the environmental measures that they think are the most suitable for the local natural environment. This will include both mandatory and voluntary measures under pillar one and two.

I personally expect that each member state will set up a layer based approach in which farmers will receive more money if they implement more ambitious environmental and climate practices. This week, the European Court of Auditors also released a very critical report of greening. It said that the system has led to very few actual changes in farming practices and only made the direct payment system more complicated which is quite a painful conclusion if you know how much money is spent on these measures. Namely €12 billion per year, which is around 8% of the total of your budget. So, you could say that's quite a waste of money actually.

Adam
Well, absolutely. So, what other aspects of the future CAP, that perhaps have not been explicitly spelt out in this communication, do you see as being important elements of future discussions?

Pieter
I think that making the distribution of income support to farmers more fair and equitable will definitely be an important topic in the future discussions on the CAP reform. This regards a statistic that is often quoted, is that 80% of direct payments now go to the 20% largest farms which also have the highest incomes. So, in general, these subsidies are not very effective in reaching their objectives which is helping farmers with low income who need the most financial support. Many people believe that this is a very unfair system that needs to be changed. 

An early league version of the communication of the Commission actually mentioned an option to put a mandatory limit on the amount of direct payments that one single farmer can receive. This is what they call capping. The number was put at between €60,000 and €100,000 per year. This proposal in the end was not included in the final version of the communication but Commissioner Hogan has said several times that this issue needs to be addressed before the next CAP period.

I personally think that it will be very tough for the Commission to realise this and to introduce more forgoing capping measures that are mandatory because member states have always rejected these restrictions in the negotiations in the past. Also, in the council meeting this Monday some big agricultural countries like the Netherlands and Denmark already said that they will not accept new mandatory limits to their direct payments.

Adam
For example, interesting point actually, how have the Commission's plans gone down with stakeholders including member states, farming groups and the like?

Pieter
The main criticism that has come from stakeholders so far is that the plans could lead to a renationalisation of the CAP as they say it. Since the member states would now be able to adopt 27 different national agricultural policies. In particular, farming organisations mostly fear that this would create unfair competition on the single market between farmers from different EU countries. While NGOs are more concerned that member states in the future will just adapt lower environmental ambitions in order to protect their own agricultural sectors.

I personally think that these fears for a possible renationalisation are a bit overstated because the implementation of the CAP is actually already very different now in different member states. The countries made very different choices in the priorities and the measures they selected in the rural development programmes. There are also big differences in the amount of direct payments that they provide to farmers. For instance, the average amount that is paid per hectare of agricultural land is €115 in Latvia or it's more than €600 in Malta.

Adam
So, just a summary. Do you think these plans will largely be adopted or are we going to see some major changes as we move towards a final agreement?

Pieter
I think there will definitely still be some major changes before a final agreement will be reached. First of all, the commission still needs to make the actual legislative proposals on the CAP reform and they will only do this when there's more clarity on what the budget will look like for the next financial period. These discussions on the multi-annual financial framework are only expected to finish in July next year if everything goes well. Afterwards it's almost certain that the European Parliament, the council, will make significant amendments to the plans because the recent discussions in these two institutions have already shown that not all countries and political groups are particularly enthusiastic about the new proposals.

Finally, the elephant in the room is, of course, Brexit. The UK is a net contributor to the EU budget now, so Brexit will very likely take a big chunk out of the future CAP finances and that will also have an impact on the specific design of the different policy instruments. What is more, there's a real chance that the start of the next implementation period for the reformed CAP will be postponed to after 2020 because of the uncertainties caused by Brexit. Especially if the negotiations between the EU and UK don't go very smoothly and they cannot agree on a complete deal by 2019.

The official position of the European People's Party, the biggest political group in the parliament, is even that the CAP should not be reformed before 2024 because of all the uncertainties created by Brexit. So, let's see how both of these very important negotiations will evolve in the future Adam.

Adam
Absolutely. Thank you very much Peter.

Moving on now to the long-running saga over the re-authorisation of glyphosate in the EU. Last year this thorny issue was kicked down the road somewhat by a temporary 18-month re-authorisation in the summer of 2016. This was due to end at the end of 2017 but the situation has now been resolved, at least in parts. Alessandro, what has happened here? What was the final outcome of this re-approval process? How did they get there?

Alessandro
Yes Adam, that's correct. As a general rule, the Commission proposes the renewal of an active substance for fifteen years when all approved criteria are met. Glyphosate is not routine case. In May, the Commissioner proposed a ten-year renewal and gave the member states time to ponder the matter over the summer months - but with a warning. The EU health and food safety chief, Vytenis Andriukaitis, has made clear that he wouldn't reauthorise the pesticide without a qualified majority of member states in favour, which otherwise would have forced the Commission to take the bull by the horns, so to speak, and make itself the tough decision of the renewal becoming the target of growing opposition to the substance among many Europeans.

So, after, member states representatives of the standing committee on plant and animal food failed to reach a majority at the end of October and with the clock ticking, the Commission put a shorter renewal period of five years on the table. Also, taking on board the resolution adopted by the parliament which calls for a full ban on glyphosate by 2022.

On 9th October, as the standing committee again produced no decision, the matter was then deferred to the so-called appeal committee where a vote was held on 27th November, this time successfully. Just two days ago, the Commission has then formally approved the renewal of glyphosate for the next five years, which kicks off this Saturday (16th December 2017). It's important to note that after abstaining twice from voting, Germany's decision to cast a favourable vote was crucial in breaking the deadlock in contrast to the other heavyweight in Europe, France, which has plans to phase glyphosate in the coming years.

Adam
What were the arguments on both sides for reauthorisation or not?

Alessandro
Well, the temporary reauthorisation by the Commission was based on two scientific assessments issued by the European Food Safety Authority and the European Chemicals Agency, which both determined that glyphosate is not carcinogenic for humans. By contrast, the cancer agency of the World Health Organisation are using different scientific findings than the two European agencies concluded that the pesticide is probably carcinogenic for humans.

These contradictory results have triggered a lot of debate in the EU, especially since the two agencies didn't reanalyse the data provided in the reference studies which were, for the most part, commissioned by the pesticide industry. Only some of these studies are publicly available in fact and a lot of data is withheld from the public on grounds that they are classified and may contain commercial secrets.

There was also huge outcry when a medical correspondence between the EU agencies and Monsanto, which uses glyphosate to make its herbicide round up, was unveiled. With environmental organisations denouncing have an involvement of the industry to have these products reauthorised despite the evidence for harmful effects on human health and the degree of contamination of soils and water.

Also, our European citizens initiative called Ban Glyphosate and Protect People and Environment from Toxic Pesticides was quickly signed by more than one million people and submitted to the Commission for review. On the other side of the fence, the pesticide, chemical and crop protection industry have been maintaining all along that glyphosate in an indispensable tool for farmers to ensure high quality, cheap and steady food supply. The industry has been accusing green organisations of scaremongering and that there is no reason to doubt the scientific assessments made by the EU agencies. More importantly, they say that currently there is no biological and less pollutant alternative to glyphosate. Failure to have glyphosate on the market would prevent farmers to do their job of providing food to feed the booming world population.

There was also an interesting study recently out stating that glyphosate is crucial to conservation agriculture, which is a way of farming meant to be more respectful of the environment with minimum tillage, environmental organic soil cover and crop protection. In summary, opinions on both sides are still very divided.

Adam
Absolutely. So, the fact that the reauthorisation is only for five years suggests that there's a ticking clock really for the use of this herbicide. Do you think farmers should be preparing for the loss of glyphosate from their crop protection tool kits?

Alessandro
That's difficult to predict, Adam. The active substance is reauthorised until December 22. Now it's up to individual member states to re-evaluate all existing authorised products containing glyphosate. They may also decide to introduce restrictions or bans for some or all of them based on the particular circumstances in the territories. Countries such as France or Belgium seem to be heading down this road, for instance. Certainly, all eyes are now set on glyphosate and its potential dangers. Therefore, avenues are going to be explored to come up with the alternative products which have less of an impact on the environment or pose less of a health risk while helping farmers in their daily activities.

There is also an initiative started from the socialists and greens of the EU parliament which aims to challenge in court the reauthorisation of glyphosate by the Commission. It will be interesting to see how that develops. In short, a new momentum at least among the public seems to be picking up towards a reduced independency and achieving a pesticide-free future. However, the implementation of the sustainable use of pesticide directive by member states remains patchy and suffering from delays and uneven coverage.

Adam
Okay. So, looking ahead now, in the last few days the Commission seems to have accepted that its current process for reauthorising pesticides and herbicides is deeply flawed and lacking in transparency. So, what is the Commission planning to do about this in the future?

Alessandro
Only two days ago the Commission announced that it will be presenting a legislative proposal by Spring 2018, so next year, to further increase the transparency of the quality of studies used in the scientific assessment of pesticides. These rules could grant the public access to the raw data included in the studies and would aim to strength the governance of conduct of EU agencies, with involvement, for example, of public authorities to decide which studies are needed for each specific case.

An important point to mention here is that the EU executive is against using public money to commission studies which could help the industry to put a product on the market. However, it's contemplating the possibility to finance ad hoc studies by EU agencies when serious doubts on widely-used substances are raised. A public consultation on this is expected to be launched shortly.

Adam
Thank you very much for that update Alessandro.

Alessadro
Thanks.

Adam
Now, moving onto the issue of European food law. 2017 has seen a number of very significant developments in food labelling regulation. At the very beginning of the year we saw the start of the controversial French country of origin trial. Other countries soon after started their own origin labelling schemes. I'm not joined by Peter Rixon, our senior European food law analyst for IEG policy. Hi Peter.

Peter Rixon 
Hello Adam. You're right, it's been a very busy in terms of labelling developments and, as you say, it kicked off in January with France launching its two-year pilot scheme and that's specifically for labelling dairy and meat in processed foods. Now, the origin labelling schemes have worried MEPs and industry. They've been talking about the potential to fragment the single market and calling it gastro-nationalism.

However, with the French scheme, the European Commission gave permission for France to push ahead with it and that started in January. It basically allows French consumers to know what ingredients in the products they buy that are made in France. Now, COOL has been controversial, particularly because other member states have followed in France's footsteps, and Italy passed a dairy origin labelling law earlier this year as well, in January, related to milk, butter, cheese and yoghurt. Portugal and Spain are among the others that also have passed origin labelling laws on the back of France's work.

Interestingly, only recently Italy's legislation on origin labelling of wheat and rice was subject to a complaint that the food industry has submitted to the European Commission, saying that Italy didn't inform the Commission about its plans to introduce that particular bit of legislation. So, it's getting quite difficult now on COOL. My last point on COOL is that the European Commission's going to be producing an impact report on this French pilot scheme in 2018, so that will be eagerly awaited as I'm sure you can imagine.

Adam
Yes, I can. I'm sure a lot of people are keen to read that. Also at the beginning of the year, the European Commission made a decisive move on alcohol labelling, which I understand was quite a long time coming.

Peter
Yes. The European Commission in March said that the drinks industry had one year to come up with its own self-regulatory labelling scheme, so that consumers can find out what ingredients and nutrition information is on the label. You may know that alcoholic beverages over 1.2% of alcohol content have been exempt from labelling requirements under the food information to consumers regulation. NGOs in particular have been waiting for about two years for the Commission to come up with a resolution to this. NGOs have complained that they've seen no reason why alcoholic drinks should get special treatment. So, what the Commission's done is come up with a proposal that the industry presents its own scheme, if it doesn't do so within a year, so by March 2018, then a regulation will do the job instead. Commission's been criticised for this for allowing industry to devise its own scheme.

However, this is what it's done and we've got until March 2018 to see what the results are. Renate Sommer, a German MEP, has said that she doesn't think the drinks industry will be able to come up with the goods in time but we shall see.

Adam
So, traffic light labelling continues to occupy the thoughts of food policy experts across the EU. Again, France, I believe, introduced a colour-coded scheme in 2017. Was that a welcome move? I know Italy is not a fan of the traffic light system.

Peter
That's right. France was, again, at the forefront of labelling matters this year, introducing what it calls its Nutri-Score system. It uses the orange, green and red colours of the UK traffic light system, although it's slightly different. The system was effectively the one that was chosen out of a ten-week trial at 60 supermarkets in France and, as a consequence, it's already been introduced into four major supermarkets. Yes, Italy has always felt threatened by traffic light labelling because it feels the UK scheme unfairly discriminates against Italian products. In the past, Italy has actually brought legal action against the UK Commission or sought to over traffic light labelling.

This year, we've seen the set up of a new organisation in Italy that among its task is to fight the proliferation of traffic light labelling across Europe. However, it's got quite a hard task in front of it because the latter part of this year we saw Portugal and Romania introduce draft legislation into their Parliaments that would, effectively copy UK-style traffic light labelling schemes for food.

Adam
So, sticking on the theme of colour coding, the industry has seen the popularity of traffic light labelling boom and has very recently launched its own scheme. There's been a backlash against this, I understand.

Peter
That's right. Six large food companies, Coca Cola, Mondelez, Nestle, Pepsico, Mars and Unilever revealed earlier this year that they were bringing in their own portion size based traffic lights labelling system. It was finally introduced on November 30th and they've called it the evolved nutrition label. Whilst the colour-coding aspect of it has been welcomed by NGOs, NGOs are also saying that it should be based on nutritional quality not quantity. The industry has done this because the European Commission was supposed to come up with provisions on portion sizes under the food information to consumers regulation but it hasn't done. In the absence of that, industry has come up with its own scheme. Again, Renate Sommer, very significant German MEP because she was a repertoire for the food labelling legislation of 2014, has expressed her annoyance with the Commission that individual companies have now come and done what the Commission maybe should have got on with. However, the European Commission had never actually been set a deadline to undertake this work.

Adam
Okay. Moving on again, the labelling of vegetarian foods has dominated the headlines of late. I noticed a story recently saying the meat industry was finding itself on the defensive. So, what's that all about?

Peter
Yes. In January this year, Christian Schmidt, German Agriculture Minister, kicked it all off by saying that he felt terms like vegetarian schnitzel and vegan sausage were misleading. This has been echoed throughout the year by various bodies. Also in the US, has to be said. It's arguably symptomatic of meat's worsening image. As you know, in 2015, red meat was described by the WHO as potentially carcinogenic and meat production has come under criticism for contributing to climate change. 15% of carbon emissions, apparently, come from meat production every year, according to the Food and Agricultural Organisation of the UN.

In light of all this, we've seen alternative protein products such as soya or the Quorn products gaining market share and the meat industry's feeling the heat from this. It's had a bit of support, the meat industry that is, this year with ECJ ruling. European Court of Justice ruling in June that said that vegan products can't use words like butter, cheese or cream to describe their products. Dutch Food Safety Authority, a smaller story this was, warned a company called the Vegetarian Butcher not to use certain names for non-meat products. It's a bit of a battle ground which will continue into 2018. There's also an outstanding issue, again, with the European Commission, namely that has been tasked to legally define the terms 'vegan' and 'vegetarian' for the EU 28 but it hasn't done so. However, from what we hear, we can expect a definition by 2020.

Adam
So, labelling has long been seen as a way to reduce food waste mountains really. Can you tell me about the significant steps that have been taken this year to introduce clearer date labelling to reduce this food waste?

Peter
Yes. In various countries and at EU level, it's been realised that consumers are confused by date labelling and, as a consequence, they're wasting edible food. The 'best before' and the 'use by' terms are not fully understood. On top of this, member states have pledged to cut food waste by 30% by 2025 and 50% by 2050. So, faced with these ambitious targets, they're looking at date labelling to play a bigger role in cutting food waste.

The UK, at the latter part of this year, has issued guidelines on date labelling which was for industry and it also introduced a new logo which should help consumers to understand what they can eat and what is no longer edible. Global companies as well this year have taken an initiative to be praised for which is about 400 of them have said they're going to harmonise date-labelling by 2020. Harmonising means that they would only use one date label at a time and in a standardised manner.

Adam
Well, it's impossible to pick up a newspaper nowadays without reading something about Brexit and there's been a lot of questions around how the UK's withdrawal from the EU is going to affect food. Have we had any answers at all over labelling? What's going to be happening with the food labelling system?

Peter
Well, sort of. One of the big concerns was what was going to happen to products that were under the European Commission's protected geographical indications scheme. In the middle of the year a significant document was published by the European Commission which basically advised the UK to introduce legislation to ensure that protected geographical status on foods was respected by both sides in the future post-Brexit. This was reassuring because it showed how highly the Commission rates this labelling and they were prepared to seek clarity very early on before any negotiation on trades deals to specify-, this affects about 3,300 products both in the UK and across the EU.

It's very reassuring for those who produce these products that it's at top of the list of priorities and ensuring that there's a smooth transition here. On a similar note, we've heard overtures from Athens that it's devising a strategy to protect the term 'Greek yoghurt', so we can expect to hear more about that in 2018.

Adam
Looking ahead to 2018, we've got Bulgaria taking over the European Commission presidency in January. Can we expect the Bulgarians to further the cause of labelling over the coming years?

Peter
Well, we can certainly expect them to be busy next year. Mainly because of the March deadline for the alcohol labelling scheme. Although, as I've said, MEPs don't necessarily think that the alcohol industry can get their act together in time. A lot of beer companies are already providing nutrition-carrying labelling in expectation of the changes ahead. So, yes, we can expect some developments there.

Adam
Thank you, Peter.

Peter
Thank you, Adam.

Adam
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