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Covid-19 update #4: EU measures and developments

Dear IFOAM EU members, Dear members of the IFOAM EU interest groups and expert groups, Since our last update on COVID-19 and its impact on organic and agriculture, there have been interesting new developments which we would like to inform you about. I have split them up into different topics for your convenience.  

New organic regulation

After our president Jan Plagge sent his letter to the Commission call to delay the implementation of the new Organic Regulation, Member of the European (MEP) Parliament, Martin Häusling (Greens/EFA, former EP rapporteur on the organic regulation review), joined IFOAM EU’s call . As we mentioned in our COVID-19 update #3, IFOAM EU considers that this is important for organic operators and the organic control system to focus on responding to the coronavirus crisis. Several Member States already support this request, and we hope that the European Commission will follow our proposal.

Farm to Fork strategy

In our last update we also informed you that the publication date of the Farm to Fork and the EU Biodiversity Strategy became uncertain due to changes of the Commission’s 2020 work programme. Recently, Commission Vice-President Timmermans clarified that the Farm to Fork Strategy and the EU Biodiversity Strategy, will only be delayed by “a couple of weeks”, and are now expected to be published on 20 May (instead of 29 April).

Common Agricultural Policy (CAP)

To increase the cash-flow of farmers through the CAP, the Commission will increase the advances of direct payments (from 50% to 70%), as well as the payments for rural development (from 75% to 85%). Farmers will start receiving these advances from mid-October. The overall number of on-the-spot checks for direct payments will be reduced. As we covered in our last email, many stakeholders were also pushing for the European Commission to make use of instruments under the Common Market Organisation (CMO) Regulation (1308/2013), such as the Private Storage Aid (PSA). After Agricultural Ministers and Members of the European Parliament expressed the urgency to trigger market measures, the Commissioner for Agriculture and Rural Development, Janusz Woiciechowski recognized the pandemic’s consequences for the agri-food sector and announced further exceptional measures.These measures include PSA in dairy and meat, authorisation of self-organisation market measures by operators in hard hit sectors and more flexibility for fruits, vegetables, and wine.

Almost €80 million will be allocated for private storage aid of dairy and meat:

  • Cheese will concern a maximum amount of 100,000 tonnes,
  • skimmed milk powder 90,000 tonnes,
  • butter 140,000 tonnes,
  • sheep and goat a total of 36,000 tonnes,
  • and for beef (first time PSA will be applied) 25,000 tonnes are foreseen.

These recent developments want to help farmers in these difficult times, and may contribute to reduce important amounts of food waste due to COVID-19. 

As some operators struggle to sell their produce, citizens in Member States that have been hit hard by unemployment are sometimes not able to buy sufficient quantities of food. As a solution, there are stakeholders proposing to restrict greening measures of the CAP. In their view, this would facilitate an increase in low-cost production, in our view this is a worrying development. Portugal seems to be willing to follow such demands as it recently announced a relaxation of the obligation of farmers to comply with certain environmental measures during 2020. IFOAM EU will keep monitoring this worrying development and send appropriate messages to policy makers.

Impact on products & markets

Both in organic and conventional production, dairy is hit hard. Farmers had to dispose of milk, as demand from the food industry has fallen as much as 50%. Other sectors, like the fresh market and wine, are increasingly affected. Not only must American dairy producers dump milk down the drains, vegetable and fruit growers in the USA have started ploughing their fresh produces under the fields as the demand is disappearing.

The Commission’s latest short-term report on agricultural markets, however, speaks of EU markets as quite resilient. Compared to the 2010 crisis, it mentions current stocks are full. Some highlights from the report:

  • In organic, staple crops profited most in the current situation;
  • there is a fall in the price of dairy products due to the Covid-19 outbreak coinciding with the spring peak of EU production;
  • beef and sheep production are highly impacted and will depend on home consumption and the capacity of retail to market additional meat products;
  • pork production is still limited due to the African Swine Fever risk.

The flower and nursery sector are severely impacted as almost all outlets are closed. The Commission will include live plants and flowers in their proposal for exceptional derogation measures from EU competition rules. The industry welcomes this positive signal, but stresses proposed measures will not bring any significant relief for their sector, which differs greatly from the other agri-food ones.  

Market developments

Besides sufficient production, another crucial aspect for food availability is free circulation and distribution of goods in the EU internal market. However, some countries promote increasing of protectionist measures that would restrict the distribution of agri-food products. Enforcing bans on imports of foreign products most likely will not comply with EU competition rules and the free movement of goods. Nonetheless, countries like the Czech Republic, Germany, Greece and Austria encourage their citizens to favour national products.

For more specific updates about the EU institutions and the national situation, we have prepared a living document on our extranet (under Hot Topics). It is a work in progress and we encourage you to add details from your own countries. If you would like to read our previous briefings about Covid-19, go to the news overview on the member extranet.

Feel free to contact communication@ifoam-eu_org if you are experiencing login issues. Please do reach out to us should you have any further questions, suggestions or concerns.

Organic regards and be safe,

Eduardo Cuoco

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