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Outlook 2021: A critical year for the European Commission’s plan for a sustainable food system
20 January 2021Steve Gillman
The European Commission to release eight proposals from
its Farm to Fork (F2F) strategy in 2021
A carbon farming initiative hopes to reward food
producers that adopt more environmental action
Details will also emerge about the F2F's vision for
guaranteeing EU food security in the future
Revised EU plant protection rules hope to give farmers
more low-risk pesticides
The Commission is expected to press the agri-food
industry to integrate sustainability into corporate
strategies
New EU import, marketing and procurement rules will
also reinforce sustainability trends
From new rules on animal feed to measures that scale-up carbon
farming and increase corporate action, the European Commission is
working on a range of proposals in 2021 to shape a more sustainable
food system within the EU and beyond.
These actions stem from its Farm to Fork (F2F) strategy, the EU
executive's 2030 plan to balance the agri-food sector's economic,
social and environmental performance - and the next 12 months are
set to be a decisive period. At least 8 of the F2F strategy's 27
planned actions are scheduled for release and together they provide
the most detailed picture into how the EU executive hopes to
achieve its new sustainability vision to date.
But the Commission also faces a challenging dynamic - it cannot
lean too hard on environmental action since it could fuel domestic
and international criticisms over the F2F's economic and social
impact. On the other side, if these actions are not green enough
then the Commission could undermine its own commitment to make the
EU climate neutral by 2050.
The EU executive must think carefully on where to draw the line,
but if the right balance is struck then 2021 could be the year the
Commission laid the groundwork for a successful transition to a
sustainable food system and began to bring new value to agri-food
supply chains.
Farm focus
Critics of the F2F strategy claim the policy's environmental
ambition risks food supply and farmers' income, but the Commission
will put forward two actions in late 2021 that may ease some of
these concerns.
The 'EU carbon farming initiative' hopes to create a direct
commercial link between environmental protection and farmers' bank
accounts. It centres around food producers adopting a set of
agriculture practices that reflect a certain amount of carbon
stored in soil, which can then be sold as credits. The proposal
arrives in the third quarter of 2021 and is likely to be
accompanied by EU incentives to take up carbon farming practices
such as zero plough and no-till, rewetting peatlands, preserving
grassland, and establishing diverse landscape features, like
hedges, buffer strips and non-productive trees.
Unfortunately for the Commission, an EU-wide carbon farming
scheme is still some way from being set up as it notably lacks a
platform where respective credits can be bought and sold. This
requires stronger data collection and monitoring alongside more
robust national auditing and the creation of trusted marketplaces.
Expect the EU carbon farming initiative to include measures that
encourage member states to address these weak spots.
Several months after the carbon farming initiative is released,
the Commission will put forward its 'contingency plan for ensuring
food supply and food security'. This aims to ensure crises
affecting the food system do not threaten consumers' access to
safe, nutritious, and sustainable food. The Commission is currently
collecting feedback on this proposal, with farming organisations
highlighting the need to develop protocols that keep supply chains
running and consumer groups wanting greater protection against food
fraud.
The EU executive has said it will establish a crisis response
mechanism when the bloc's food security is threatened and build on
the lessons learnt during the COVID-19 pandemic, which could see
its 2020 measures replicated, such as creating 'green lanes' that
kept EU supply chains open alongside guarantees over the movement
of seasonal farm labour.
If member states and the European Parliament back the above
proposals, it could go a long way in negating the EU policymakers
that use food security fears to oppose increased environmental
action. That could then pave the way for the Commission to push
ahead with stronger F2F proposals at the farm level and add some
needed green momentum to the implementation of the next Common
Agricultural Policy (CAP) - and its €55.8 billion annual
budget.
But these proposals will probably not go far enough for the
agri-food groups that want an impact assessment on the F2F strategy
before it is aligned to national polices, notably the consequences
of the pesticide target on food production and farmers' income. The
Commission can begin to ease some of these concerns when it revises
rules that regulate placing plant protection products on the EU
single market, expected in the last quarter of 2021.
This is part of another F2F plan to reshape the bloc's pesticide
market by trying to make it easier to place more sustainable
pesticides onto the single market. Such an initiative would be
welcome reprieve to the plant protection sector which has long
complained about the regulatory obstacles to get new products on
the EU's single market. However, the EU executive will have to
tread lightly not too block existing solutions or undermine its
Biodiversity Strategy, which is a complimentary policy to the F2F
that has several of its own goals, such as reversing pollinator
decline.
Business expectations
The cost of sustainability has stopped some businesses from
adopting more environmentally friendly practices, with many farming
groups accusing them for not paying their fair share to raise their
sector's green standards.
That dynamic could face a big change with the F2F strategy's
'Corporate Governance Framework', expected in the first quarter of
2021. This EU proposal hopes to transform the way businesses
operate in the food system and is likely to require the food
industry to integrate some degree of sustainability into their
corporate strategies, with mandatory supply chain due diligence,
clarification of directors' duties and changes to directors'
remuneration all being considered by the Commission.
Some agri-food giants have already campaigned EU policymakers to
introduce legally binding rules to speed up the transition to a
more sustainable economy. In 2019, Barry Callebaut, Mars Wrigley
and Mondelez called for EU-wide regulations to strengthen
compliance with human rights and environmental law when sourcing
their raw materials, citing a lack of legislation in creating an
even-playing field for their sector's sustainability and bringing
long-lasting change. Some businesses have faced market barriers
when trying to increase sustainability, like being undercut from
less ambitious competition.
This industry support will give the Commission a boost of
confidence when it puts forward the framework, particularly since
there already seems to be hunger for legally binding requirements
from other EU policymakers. Members of the European Parliament
(MEPs) recently adopted a position that
recommends a series of mandatory sustainability obligations for
companies rather than continuing to rely on voluntary measures.
These F2F proposals could give the Commission some needed
ammunition to fight back against some of the louder criticisms from
agricultural groups which argue that the F2F is too focused on the
farm and not enough on the fork. If not, the EU executive can turn
to another F2F proposal designed to push the food industry more
towards making healthy, sustainable food options. Towards the end
of 2021, the Commission will launch an initiative to 'stimulate
reformulation of processed food', which is expected to include
setting maximum levels for certain nutrients in products and will
likely see some demand grow for more sustainable ingredients.
The Commission has designed these F2F actions to combine and
create a stronger commercial link between farmers and agri-food
businesses, but that connection also depends on consumers' pockets.
Demand for sustainability does seem to be growing, despite the
ongoing coronavirus pandemic, with two-thirds of EU citizens
prepared to pay at least 10% more for agricultural products made in
a way that limits their carbon footprint, according to a recent
Eurobarometer survey. That is a welcome trend for the F2F, but
Commission will have to wait to see if consumers put more of their
money where their mouth is.
Market forces to watch
Where the F2F strategy's more direct actions fall short, the
Commission will hope other measures targeting the EU single market
will succeed. Several other proposals will attempt to add
additional market forces that create greater sustainability
momentum, such as plans to revise EU marketing standards expected
in late 2021.
This proposal aim to establish a minimum quality for agri-food
products through definitions and criteria for factors like
labelling, production methods, and packaging. The Commission wants
to reinforce these standards by incorporating new sustainability
factors like food loss and waste generated. If adopted, this could
help raise the general bar of sustainability in the EU and go some
way towards levelling the sector's playing field.
The Commission will also hope its Q3 proposal to set minimum
mandatory criteria for sustainable food procurement in schools and
public institutions will galvanise the market further. According to
the EU's Joint Research Centre, the European social food service
market is worth €82 billion. Tapping into this value could cause a
big surge in demand for sustainable EU food and incentivise more
producers to adopt greener practices.
It is still unknown what this procurement plan will expect from
member states, but the proposal will likely garner support from the
national governments hoping to boost demand for domestic
sustainable food production, such as Ireland and its 2050 plan to
reach net zero emissions from its agriculture sector. Some
environmental groups want member states to exclude unsustainable
livestock production from this procurement plan, but the Commission
has so far been unwilling to omit any domestic sectors from these
new rules. Time will tell if the EU executive gives certain sectors
preference over others.
Trade will be another tool the F2F plans to use to send further
sustainable forces into the EU market. In the last quarter of 2021,
the Commission will put forward a revision of the EU's feed
additives regulation, aimed at reducing the environmental and
climate impact of animal production, avoiding carbon leakage
through imports, and supporting the transition towards more
sustainable livestock farming. This is likely to push for greater
domestic feed sources, which the Commission hopes will not only
increases the bloc's self-sufficiency, but also give farmers a
greater share of the animal feed market. Momentum for this is
already building with France recently launching a plan to increase
the country's plant protein production by 40%.
The feed additives regulation will be further reinforced by new
EU rules that limit unsustainable imports on the EU's single
market, like the Commission's plan to curb third country agri-food
products that are linked to deforestation - with one of the main
commodities being soy for animal feed. This is likely to manifest
in EU due diligence rules before the summer of 2021.
That would see at least nine separate proposals that could drive
the sustainable food transition in 2021. And if these separate
market measures effectively combine to complement each other, then
the Commission will have gone a long way in meeting its 2030
sustainability commitments. But if the EU executive fails to
balance economic stability with environmental action then any
proposal could fuel enough criticisms from the agri-food sector
that the F2F's long-term success is destined to fail. What is clear
- it's all to play for over the next twelve months.
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