Crop prices set to rise up to 70% due to EU pest management restrictions

Date

13 Oct 2008

Sections

Trade & Society
Sustainable Dev.
Health & Consumers
Agriculture & Food

If the new restrictions come into effect:

·               Wheat and potato prices will increase by at least 20%
·               EU to become net importer of key crops
·               The cost to be borne by European consumers

A study released today by the European Centre for Agricultural, Regional and Environmental Policy Research (EuroCARE) concludes that new legislation being tabled in Brussels will have a profound upward effect on the prices European consumers pay for food.  The legislation will drastically reduce the pest management options available to European farmers and consequently yields will drop steeply, driving up prices.

According to the research, should MEPs push ahead with the new legislation set to replace  Directive 91/414/EEC, so many critical pest management tools will be removed from use that prices for all agricultural produce are likely to increase, building on expert assessments for likely yield losses. In the worst case scenario, prices for cereals and vegetables could rise by 73% and 104% respectively.  Even the most conservative product-loss scenario examined by the researchers will to lead to price increases of at least 20% for key staples such as wheat and potatoes.

"These increases are not surprising, given the current pressures on food prices and the importance of the EU to international markets. The price increases forecasted in the study are also in line with recent experience. In 2007, for example, world wheat supply was about 20 million tonnes lower than in 2005 and prices went up by more than 100%", says Dr. Marcel Adenaeuer from EuroCARE, Bonn.

With such major impacts anticipated, researchers predict that much of European agricultural production could be lost to other countries, jeopardizing the position of the European Union as a net exporter of key crops. For example, wheat production is likely to increase in USA, Mexico, Russia, Belarus and Ukraine as well as South Africa, China or Australia - as it drops in Europe.

Friedhelm Schmider, Director General, of the European Crop Protection Association, comments: "All crops need protection from disease and pests.  If you remove the tools farmers use to protect their crops, yields will go down - and prices will go up. This research proves that banning pest management options will, in the end, hit consumers in the pocket."

"EU policymakers haven't yet considered the full impact of this legislation on the cost of our food.  At a time of heightened concern about economic stability and record food prices, with food riots in some parts of the world, not examining the consequences of this legislation will result in policy disconnected from reality."

 "Given the findings of the EuroCARE study, the European Crop Protection Association is calling for the European Parliament and Commission to request an independent, comprehensive impact assessment on the proposed pest management restriction criteria from the European Food Safety Authority (EFSA).  Europe is the world's top producer and top exporter of food, an achievement which is built upon a foundation of effective pest management.  Banning the tools without proper scientific consideration is fraught with risk.," adds Schmider.

The EuroCARE research builds on other studies, which raise concern about the impacts of the new pesticide legislation proposals. Earlier this year, the independent Italian research institute Nomisma warned that under the proposed legislation, yields of wheat, potatoes, cereals and wine grapes in Europe could decrease by 29%, 33%, 20% and 10% respectively by 2020. Similar expert based yield losses, between 10% and 77% depending on scenario and crop, have been fed into the agricultural sector model CAPRI to simulate the resulting price effects.

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Note to editors:
For the last two decades, the Authorisation Directive 91/414/EEC of 15th July 1991 has regulated the agrochemical substances that farmers use in the EU. This legislation is currently being revised in Brussels, including proposals to ban many substances currently in use.

The study "Additional constraints for plant protection: Price Impacts on European agricultural markets" reviews the effects of the proposed legislation based on the European Commission's proposals, and two scenarios proposed earlier this year by the European Parliament (exclusion criteria and candidates for substitution).

Findings indicate that under the Commission proposal, the prices for potatoes and wheat will increase by about 20%. Under the Parliament proposals, potato price increases vary from 33% to about 58%. In these circumstances, wheat prices increase more from 40% to about 70%. As a result researchers forecast that most of EU production will be lost to other countries, thus jeopardising the position of the European Union as a net exporter.

The study was performed using the CAPRI (Common Agricultural Policy Regionalised Impact) modelling system. The model is a well-known instrument to quantitatively assess the impacts of changes in political, socio-economical or environmental drivers on the agricultural sector. The core of the model is a set of behavioural functions representing farmers, the processing industry, and consumers of agricultural goods. In view of repercussions on international agricultural markets it covers the whole world but it is more detailed for European agriculture.

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The European Crop Protection Association (ECPA) represents the crop protection industry interests at European level. Its members include all major companies and national associations across Europe. For more information: www.ecpa.eu.

For more information:
Euros Jones
Director Regulatory Affairs
European Crop Protection Association
Tel: +322 663 15 53
Tel: +32 2 663 15 50 (reception)
euros.jones@ecpa.eu