Category: Blog posts

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More on farm-retail price spreads during food price inflation

My previous blog post dealt with trends in the farm-retail price spread at the aggregate food basket level in EU Member States (both for food purchases for at home consumption and for food consumption away from home) based on a new FAOSTAT data series on the food value chain. A key conclusion was that farmers’ share of consumer spending on food tends to fall over time because of the increased quantity and quality of the marketing services added to farm raw materials as living standards rise. A falling farm share in every euro spent on food at retail or food service level is not necessarily an indicator that there is unequal bargaining power and thus an unfair distribution of value added along the food value chain, although neither does it rule out that possibility.… Read the rest

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Distribution services take more than half of spending on food at home in EU countries

Anger over the gap between farm and retail food prices has been one of the factors behind the farm protests earlier this year. Particularly when  prices at farm level move in the opposite direction to retail prices – more specifically, when retail food prices increase even when farm prices are falling so that margins are increasing – there is suspicion that more powerful players in the food chain are exploiting a period of price volatility for their own benefit. There is a strong belief among stakeholders that farmers’ remuneration can be improved if changes are made to the operation of the food value chain (all of the downstream actors up to and including consumers).… Read the rest

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Greater transparency needed in national aids to agriculture

On 2 May 2024, the European Commission adopted an amendment to the State aid Temporary Crisis and Transition Framework (TCTF) to allow Member States to continue to provide aid to farmers affected by persistent market disturbances up to €250,000 to end-December 2024. This followed the European Council’s endorsement in its conclusions following its meeting 17-18 April 2024 of “the proposed extension of the temporary framework on State aid and the possibility to increase the ceiling on de minimis aid for agriculture.”

Following on the European Council’s conclusions, Germany on behalf of 16 Member States informed the last AGRIFISH Council meeting in April 2024 that it was seeking an increase in the de minimis aid amounts for farmers from a total of €20,000 over three years (€25,000 in certain circumstances) to an amount of €50,000.… Read the rest

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The European Council’s Strategic Agenda 2024-2029

Two defining events for the European Union take place in the next eight weeks:  the European Parliament elections take place on 6-9 June and will determine the balance of power between the various political groups with differing priorities for the future of Europe; and the European Council meeting on 27-28 June will adopt the EU’s Strategic Agenda 2024-29 as well as attempt to agree on nominees for the EU’s top jobs, including the President of the European Commission. The climate organisation E3G has produced a very nice graphic that illustrates the key steps in the political timeline for the rest of this year .… Read the rest

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Introducing a tax on agricultural GHG emissions? The Danish case

In its first progress report on EU climate policy published in January 2024, the newly-established European Scientific Advisory Board on Climate Change noted that there is no EU-level price on emissions in agriculture/food, forestry and land use, which suffer from an overall lack of incentives to reduce emissions and increase removals. It recommended that the EU should start preparations now with a view to expanding the pricing regime of EU GHG emissions to all major emitting sectors, including agricultural/food and LULUCF, through a legislative proposal for after 2030.

In November 2023 the Commission published an exploratory study investigating ways to price GHG emissions from agricultural activities along the agri-food value chain and how this could be accompanied by providing farmers and other landowners with financial incentives for climate action.… Read the rest

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Target-compatible Environmental Payments under the CAP – Economic Requirements and Legal Scope

This guest post is contributed by Prof. Dr. Rudolf Mögele and Prof. Dr. Martin Scheele. Prof. Dr. Rudolf Mögele is Honorary Professor at the University of Würzburg; previously, he was Deputy Director General at the European Commission, DG Agriculture and Rural Development, responsible for three Directorates (Legal Affairs, Audit and Assurance and Markets). Prof. Dr. Martin Scheele is Honorary Professor at the Thaer-Institute, Humboldt University, Berlin; previously, he was Head of Unit at the European Commission, DG Agriculture and Rural Development, responsible for conception and coherence of Rural Development.

Agri-environmental payments reflecting costs incurred and income forgone

In the discussion on the CAP, more and more attention is given to the importance and functioning of environmental and climate-related payments.… Read the rest

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What does the Commission’s proposed 2040 climate target mean for agriculture?

On 6 February last, the Commission published its Communication Securing our future:  Europe’s 2040 climate target and path to climate neutrality by 2050 building a sustainable, just and prosperous society. The Communication proposes a Union-wide, economy-wide 2040 target reaching 90% net GHG emissions reduction compared to 1990 levels “that will put the EU on an effective, cost-efficient, and just trajectory towards climate neutrality by 2050, as called for under the European Climate Law”.

In fact, what the Climate Law calls for is ambiguous. In recital (30), the Commission should propose a Union intermediate climate target for 2040, as appropriate, at the latest within six months of the first global stocktake carried out under the Paris Agreement and which was concluded at COP28 in Dubai in December 2023.… Read the rest

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Who feeds Europe, and how much do they earn?

One of the demands in the ongoing farmer protests is for fair prices and a fair income. But how many farmers are there and what do individual farmers earn? In my previous post, I examined income trends at an aggregate level, both for the EU and for France as a Member State case study. In this post, I want to dig more behind the aggregate numbers to look at how incomes are distributed within the farming sector.

There are 9 million farms (holdings) in the EU. This figure comes from the latest Agricultural Census taken in 2020 (with figures in the inter-census years derived from the Farm Structure Surveys usually taken every three years or so).… Read the rest

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What is actually happening with agricultural incomes?

Farming protests are currently taking place in several European countries. Several reasons are advanced for what is prompting these demonstrations – concerns over incomes and rising costs, the burden of additional environmental regulation, free trade agreements with third countries, the uncertainty arising from increasingly volatile weather conditions, the sense that society no longer values the work of farmers in the same way as in the past. No doubt all factors play some role, but in this post I want to dissect the farm income context. I make use of a chart that I posted on my X and LinkedIn feeds a little time ago, but a blog post allows me to give some additional background.… Read the rest

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The European Scientific Advisory Board on Climate Change 2024 progress report and agricultural emissions reduction

The newly established European Scientific Advisory Board on Climate Change (ESABCC) first made its mark when delivering its advice to the Commission in July 2023 on setting the EU’s 2040 mitigation target. It recommended emission reductions of 90–95% by 2040 relative to 1990. The Commission Communication proposing its climate target will be published on 6 February 2024. It is expected to propose a reduction target in net emissions of at least 90% in line with the recommendation of the Advisory Board. This is the target to which the new Climate Commissioner Wopke Hoekstra committed in his appointment hearing before the Parliament’s Environment Committee in October last year.… Read the rest