Globalised markets pose risk to sustaining food supply continuity - V4NA interview

Globalised markets pose risk to sustaining food supply continuity - V4NA interview

The health crisis has thrown light on the strengths and weaknesses of French - and European – agriculture. It has shown the risks that globalised supply chains and markets carry for the continuity of food supply in times of crisis. These are just some of the issues Bernard Lannes, president of Coordination Rurale, a major agricultural trade union in France, spoke about in a recent interview with V4NA.

ECONOMY JULY 18. 2020 09:30

In an interview with V4NA, Bernard Lannes, president of Coordination Rurale, spoke about the coronavirus-induced crisis and its impacts in the perspective of the agricultural sector. Coordination Rurale, a major French agricultural union, received 21 per cent of the votes in the 2019 Chamber of Agriculture elections.

What impacts did the health crisis have on the situation of French agriculture?

The health crisis has thrown light on the strengths and weaknesses of French – and European – agriculture. The coronavirus created a completely new situation and exposed existing shortcomings such as globalised supply chains and markets, potentially posing a threat to the continuity of food supply in times of crisis. In France, for instance, flour almost completely disappeared from the shelves in many stores during the lockdown and stocks were running low chiefly because France imports more than 250 thousand tonnes of flour annually from Germany (where production costs are lower) and Italy. In mid-March, however, German suppliers terminated their contracts because they prioritised to supply regions across the Rhine, and this caused severe disruptions in the supply chain of French hypermarkets and supermarkets.

Or take strawberries and asparagus as a notable example of unfair competition in the European single market. France imported these products from Spain even amidst the lockdown while crops rotted on the fields of French producers because there was nobody to harvest due to a shortage of labour. Border closures imposed to contain the health crisis have shown the extent agriculture relies on cheap foreign workforce in France and in other European countries (Italy, Spain, Germany). Figures from the French Labour Ministry reveal that 270 thousand seasonal workers were employed in agriculture between April 2018 and March 2019. This implies that seasonal workers constituted one third of the labour force employed in the sector. Moreover, nine out of ten seasonal workers are low-skilled, increasing  the vulnerability of agriculture and adversely affecting  the sector s capability of crisis management, and consequently, impacting the country s food self-sufficiency.

On the positive side, however, in the face of difficulties, family-run farms in Europe turned out to be flexible enough to provide food for the population, but it is a question whether this will remain the scenario after the crisis.

During the crisis, the French state provided loans to businesses, including those engaged in agriculture. Did you also receive help during this difficult period?

On the issue of loans, it should be pointed out that farmers already had high debts before the crisis set in. Taking out further loans carries the risk that the means of production and the land will pass into the hands of some anonymous agricultural financiers, seriously jeopardising the independence of French food industry.

There were also some measures that prioritised other elements of the supply chain at the national level, assigning lower priority to agricultural producers and consumers. To ensure flexibility for certain companies in the face of supply difficulties, the French General Directorate for Competition Policy, Consumer Affairs and Fraud Control (DGCCRF) granted specific exemptions. For instance, the Directorate permitted to have the label „Made in France” put on products that, in fact, came from another EU member state and consumers were not given this information.

There were no disruptions in the production of the products I am referring to, for instance, dairy and meat products, but they were difficult to sell due to a low market demand.

The French state has provided emergency aid, but the amounts offered fall far short of the losses suffered by the sectors and are certainly not enough to survive. For example, the Agriculture Ministry announced in early June that it will provide 25 million euros in emergency aid to the horticultural sector to compensate for the costs of destroying plants and other losses. This is far from what is needed, as the loss (value of destroyed plants, loss of revenues) is estimated at 1.4 billion euros in the period from mid-March to the end of May alone.

In order to recover from the crisis and save agriculture, a recovery plan dedicated especially to this purpose would be needed at national level, just as our European neighbours have done, however, this plan has not yet been presented by the ministry.

The economic and health crisis caused by coronavirus is also having a major impact on French agriculture, therefore, there is an urgent need for the structural reform of French and European agriculture.

Can the current situation make short supply chains and the consumption of domestic products more popular?

For some sectors, yes, but we need to think bigger than that. It is not enough to encourage sectoral or territorial initiatives aimed at promoting local products, a global organisation would be needed, which requires cooperation at national and European level.

What specific reforms are planned for French agriculture?

Today, European rules on origin marking are not sufficient, as they only apply to certain products. The Coordination Rurale (CR) agricultural union believes that the solution is transparency. The aim of the initiative is to make all information available to users on the catering services and composition of products used in public catering.

A review of the Law on Public Procurement is needed to allow municipalities and canteen operators to indicate the place of origin of the food used. The aim of CR is to simplify access to public catering so that every agricultural professional can enter the market.

The union is also concerned about the gradual dematerialisation of public procurement, as under the pretext of simplifying procedures and transparency in public procurement, the smallest companies, especially farmers, remain the ones being pushed out of potential markets.

In order to make the indication of the area of origin of foodstuffs clear, the CR believes that the place of origin of the products should be clearly determined and the criteria for regularity should be specified.

What is your trade union s view of the European Union s Common Agricultural Policy?

It is unfortunate that there has never been a formal and clear assessment of the common European agricultural policy (CAP), but it is certain that, as a result of the current social plan for agriculture, members just quietly disappear. While there were 514,000 farmers in France in 2008, now there are only 448,500. If this tendency continues, by 2025 there will be only 342,000 farmers left in France, which represents an app. 30 per cent decrease compared to 2010.
 

Successive reforms of the CAP have reduced the number of farmers, who have sold their crops at a loss, with controversial subsidies, helping them to get through the difficult period. Establishing an agricultural strategy for exporting to the world market proved to be a serious mistake, as it led to Europe no longer being self-sufficient in food supply. From the outset, the Coordination Rurale condemned this ultra-liberal trend, which began in 1992 with the support of trade union officials at the time and resulted in less and less compensable state aid, which, moreover, requires tedious and costly administrative management, ruining our agriculture.

Do you think there is a place for another common agricultural policy in Europe besides CAP?

Obviously, we must strive to enable European farmers to work at profitable prices from which they can make a living, so they do not need public support.

The CAP must protect the European market and regulate production and goods, however, at the same time the CAP needs to be modernised in order to ensure that Europe is self-sufficient in food and that citizens have access to healthy quality food at affordable prices, while farmers can make a decent living from their work. In the European market, the balance of supply and demand should be regulated by variable customs duties at EU borders and a European system of protective tariffs. The CR also believes that there is a need for harmonising the European social, fiscal and environmental standards in order to eliminate distortions of competition within Europe.

According to the Coordination Rurale, the key objectives of the CAP are more relevant than ever. These objectives are to guarantee farmers a fair standard of living, to enable them to sell their products at a profitable price, to rationally improve production, to ensure the quality and quantity of supply and to protect territorial balance and the environment.

To meet our needs, the first thing needs to be done is the rebalancing of the European production in order to protect the supply-demand balance on the European market and to establish stable, fair prices. In order to satisfy the demand, the introduction of a variable customs duty on the EU borders is a must, so that the dumping due to low purchasing prices can be avoided and stable agricultural prices can be created in Europe. It is also important to set up a European Production and Market Observatory (OEPM), which would provide guidance for producer organisations to optimise production in order to keep the prices within a predetermined range. The whole point of this is to increase or decrease production according to changes in prices.

Of course, we still have an interest in exporting so-called excellent products, however, in order to balance production and production organisation, other exportable products must be limited to those that provide European producers with sufficient income without destabilising the markets of importing countries.

In the recent municipal elections in France, green parties dominated cities to an unprecedented extent, what do you think about this?

We believe that the green parties have forgotten a fundamental aspect in compiling their program, which is the price of food. On the one hand, they want to achieve a reduction in imports, and on the other hand, they would impose serious environmental restrictions on farmers, decreasing their productivity, however, prices must not be forgotten either. Coordination Rurale believes that if costs are at European level, prices will also be European, not world market prices.

From the point of view of farmers and consumers, the Coordination Rurale rejects the idea of distinguishing between elitist production and mass production. We strive to have a single agriculture, an agriculture that, given the production methods, provides consumers with food of satisfactory quality and sufficient quantity at a reasonable price, which also pays off for the farmers.

Finally, with regard to the fight against import of foods harmful to health, it is extremely important to set maximum residue levels for both consumers and farmers. We could talk about legitimate green diplomacy if a default threshold of 0.01 mg / kg of chemical residues was imposed on import of food for human and animal consumption.

Do you think „rurality” gets enough attention in the French press?

There has been a lot of misunderstanding and friction in recent years, our practices, limitations and unmet needs have been ignored. Today, farmers are looked down upon, in fact, some are particularly malicious to us, many misrepresent farmers, the criticism of traditional agricultural production blinds many and the voice of rurality fall on deaf ears, does not reach urban media, which focuses more on human fears instead of relationships.

ECONOMY

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agriculture, bernard lannes, coordination rurale, coronavirus, European Union, food industry, france, interview, pandemic