Following the unveiling of the European Green Deal in December, its food policy component – the Farm to Fork (F2F) strategy, has now been published after being delayed by covid-19. Eucolaitsupports
the shift towards increasingly sustainable food systems and is convinced that trade has a key role to
play in this regard. While the connection between trade and prosperity is well-known and established,
the link between trade and sustainability is less obvious. There is certainly a lot to be done when it
comes to transport emissions, as already outlined in the Green Deal communication, but the positive
contributions of (dairy) trade should not be disregarded. Trade is crucial for ensuring food security by
redistributing products from surplus to deficit regions, since not all areas can enjoy 100% selfsufficiency. The importance of trade for food security will grow further because of the negative impacts
of climate change which will not be evenly spread across the planet. It is not viable or efficient to
produce all kinds of agricultural products in all parts of the world. From food security and
environmental perspectives, it makes more sense to trade than trying to achieve self-sufficiency in milk
everywhere.
The EU is world’s largest exporter and importer of agri-food products and we believe it should remain
that way. Europe must be open for business with the rest of the world, especially in the current climate.
Open and rule-based trade will be essential for achieving a sustainable food future. When working
towards the established sustainability targets, incentives should be prioritised over regulation. The
strategy should be as market driven as possible to encourage European businesses to invest in new
technologies.
The ongoing covid-19 pandemic has further emphasised the importance of a robust and resilient food
system, as mentioned in the F2F communication. From our perspective, this means increasing diversity
in supply sources and export markets. Measures giving preference to domestic products – as we have
seen proliferating lately – or focusing solely on promoting short supply chains are not the answer.
With the present paper, we wish to highlight the positive contribution of trade to and comment on
some of the components of the farm to fork strategy which has the ambition to make the EU food
system a global standard for sustainability.
Food security
International trade in agricultural goods contributes to a better availability of food across the globe,
which is essential for responding to the growing demand, driven by an increasing world population and
a larger share of people joining the middle class. The nutritional quality of dairy products is top of class
but they cannot be produced across the world in sufficient quantities. In many parts of the world, the
per capita consumption of dairy products amounts to only a fraction of the European average.
Milk powders, which have a long shelf life and do not require cold storage, are ideal sources of protein
in densely populated regions with a climate not well suited for milk production. It is hard to see how
10 billion people could be fed in 2050 without further increases in both productivity and global trade
of agricultural products.
Trade and environment
Moving product from places with a comparative advantage in milk production (in terms of natural
conditions and economies of scale) to other regions where milk production is less advantageous makes
both economic and environmental sense. Trade istherefore crucial for lowering the worldwide carbon
footprint of a certain sector on a global scale. Because of its efficiency, the GHG emissions of the EU
dairy sector are extremely low in comparison to those resulting from milk production in most other
regions.
Sustainability requirements on imports
With more being asked from European producers in terms of environmental sustainability, the desire
to export our policies and requirements to third countries becomes tempting to avoid carbon leakage
and to ensure a level playing field. Any environmental demands targeting third country products will
have to be workable, proportionate, designed with the utmost care and in compliance with
international trade rules. Otherwise we might face a wave of retaliation from our trading partners who
would likely view our policies as ecological protectionism. In recent years, we have seen a proliferation
of trade wars and it seems urgent to reverse this trend, without abandoning EU values of course. As a
general principle, we would favour incentives, such as sustainability labelling schemes, over import
restrictions or taxes.
Food waste
Food losses occur throughout the whole food chain and are not always under direct control of the
actors involved. Food losses are often caused by inadequate technology, lack of knowledge and skills,
bad logistics, inefficient markets, or inadequate administrative procedures. Traders help addressing all
these issues by making supply chains more efficient. In the dairy sector, they ensure that all dairy
ingredients find a home by connecting supply to demand and by temporary storage of surplus
production.
Supply chain relationships
Trade has an important role in the supply chain by providing a variety of services to business partners
such as market and technical expertise, risk management, tailor-made products as well as financial and
logistical services. Trade limits market inefficiencies by connecting sellers and buyers.
The market orientation of the EU dairy supply chain and a functioning single market are key for
allowing the dairy sector to flourish. We reiterate that the dairy supply chain is extremely complex due
to the large number of products and outlets (retail, food service, food industry, export) which all
influence the milk price. Further interference in the supply chain dynamics is likely to impose additional
burden on operators without bringing value added. Most unfair commercial practices have been
addressed with the adoption of the UTP directive and there are numerous provisions concerning the
relationship between producers and dairy processors in the common market organisation regulation.
Eucolait is therefore not in favour of additional regulatory initiatives to manage the relations between
the various links in the supply chain. The freedom of contract needs to prevail.
Market stability – balancing trade
The smaller the market, the bigger the impact of external shocks. The EU single market is much more
resistant to adverse supply or demand shocks, such as droughts, animal diseases or trade embargoes
than an individual Member State would be. Trade takes care of temporary surpluses or shortages,
thereby reducing vulnerability and contributing to a more stable and resilient marketplace. In the same
manner, trade can contribute to more stable markets globally when barriers and trade distorting
support are reduced.
Food information
Another aspect highlighted in the Farm to Fork communication is the empowerment of the consumer.
We agree that the consumer as the last link in the food supply chain should indeed be provided with
adequate information on the nutritional properties or environmental footprint of the product that they
purchase.
We however reject the connection between sustainable food consumption and mandatory country of
origin labelling. The attempt to give preference to products from one’s own country has little to do
with sustainability and it is obvious that tailored, voluntary solutions can more adequately respond to
consumer demands than a one-size-fits-all mandatory origin labelling scheme. In this sense, we
welcome the softer language in the final version of the communication, which also stresses the need
to safeguard the internal market. The proliferation of legislation on indicating the origin of milk in
several Member States with the blessing of the Commission is regrettable and in violation of the food
information regulation and the free movement of goods principle. These developments should be
urgently reversed.
Marketing standards
Schemes which highlight the sustainability aspects of a product, such as the environmental footprint,
animal welfare or the fairness of the milk price should not be mixed with the basic compositional
requirements of a product, such as protein and fat content. The goal of marketing standards is
primarily to ensure that all products fulfil certain minimum measurable criteria, thereby guaranteeing
a level playing field. The carbon footprint of skimmed milk powder can vary a lot but it should always
be called skimmed milk powder. Other, supplementary information may clarify the performance of the
product according to various sustainability criteria.
Conclusion
Eucolait welcomes many of the initial ideas outlined in the Farm to Fork communication. At the same
time, we stress the crucial role of trade in the strategy and warn against any measures based on
protectionist premises. Increased resilience of the food system will not be achieved by a policy of selfsufficiency but by further diversifying supply chains. Europe should lead the way towards more
sustainable food systems, but this goal can only be attained if combined with openness towards the
rest of the world.
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