Apr 18, 2010

European Agriculture: Some facts you should know

Statistics, they say is like a bikini. It conceals more than what it reveals. I am not sure whether this saying holds true anymore, but statistics often helps us to put things in the right perspective. It is in this context that I think it is important to share certain facts and figures about European Agriculture.

-- European union is the world's largest producer of food and beverages, employing 8.66 per cent of its workforce and 4 per cent of EU's GDP. EU remains the world's leading exporter of agricultural goods (roughly 17 per cent of total global trade).

-- There are 13.6 million people employed directly in agriculture, forestry and fishery sectors, with an additional 5 million people working in agri-business industry. It generates over €355 billion in production. After EU's enlargement (2004 and 2007) an additional 7 million farmers were added to EU's farm workforce.

-- There are 14.5 million agricultural holdings, occupying 47 per cent of the total land area. Small farms still remain predominant in EU, with the average farm size being 12 hectares.

-- Average agricultural income in EU-27 is less than 50 per cent of the rest of the economy. farm incomes decreased by an average of 12.2 per cent in 2008-09 (primarily due to economic meltdown).

-- EU claims its greenhouse gas emissions caused by agricultural activity (including rearing of livestock) decreased by 20 per cent between 1990 and 2007 in the 27 Member States; whereas the proportion of these emissions produced by agriculture dropped from 11 per cet in 1990 to 9.3 per cent in 2007, inter alia as a result of more effective use of fertilisers and liquid manure, the recent structural reforms of the CAP and the gradual implementation of agricultural and environmental initiatives.

-- The share of Common Agricultural Policy (CAP) expenditure in the EU budget has steadily decreased from nearly 75 per cent in 1985 to a projected 39.3 per cent in 2013.

-- As a result of CAP reforms, EU claims it has become a net importer of agricultural goods with over €78 billion worth of products being imported each year.

-- There are over 40 million poor people in the EU who do not have enough to eat.

-- Since the adoption of decoupled Single Farm Payments there has been a resolute move away from trade-distorting measures in line with WTO requirements [Jacques Berthelot says this is another lie: the SPS is coupled 7 times].

-- European Parliament believes that the EU cannot afford to rely on other parts of the world to provide for European food security in the context of climate change, political instability in certain regions of the world and potential outbreaks of diseases or other events potentially detrimental to production capacity [On the contrary, India thinks it can abandon agriculture and depend on other countries to meet its food security needs -- my view].

-- European Parliament thinks that one of the main reasons why the EU needs a strong CAP is to contribute to the development of viable and dynamic rural communities, at the heart of European cultural diversity, and with a view to ensuring sustainable and balanced socio-economic development across all European territory; and points out that there is an urgent need to attract younger generations to rural areas and provide new and alternative economic opportunities for them to ensure a sustainable rural population.

--  EU believes that rural unemployment should be tackled by providing opportunities for diversification and new income sources. (emphasis mine) 

Delivering benefits in terms of public goods, which justifies the need for strengthening CAP, the European Parliament observes:

1. It recognises that farmers deliver a range of public goods which the market does not reward them for; therefore insists that they must be fairly rewarded and further incentivised to continue delivering higher-quality products, better animal welfare conditions and additional environmental benefits;

2. Recalls, therefore, that unless farming activity is preserved across the EU, no provision of public goods will be possible;

3. Recognises that generations of farmers have shaped the valued EU landscapes and, therefore, should be rewarded for continuing to do so in a sustainable way, especially in naturally disadvantaged areas; believes that they are actively contributing to the great cultural value and attractiveness of Europe, providing the backdrop for successful rural tourism; 

4. Points out that farmers have the potential to deliver additional environmental benefits that match societal demands, in particular soil preservation and restoration, sound water management and quality improvement and farmland biodiversity preservation, and that they must be encouraged to do so;

5. Believes that agriculture has a tremendous potential to adapt to and mitigate the impacts of climate change;

6. Believes, in line with the latest research available, that without a common agricultural policy, unbalanced modes of production would develop across the EU (extreme intensification on the best land and widespread land abandonment in disadvantaged areas), causing serious damage to the environment [clearly!]; insists that the cost of support through a strong CAP is nothing compared to the costs of no action and its negative unintended consequences.

7. Notes that the market fails to reward farmers for protecting the environment; therefore believes that the CAP must become greener by incentivising farmers to maximise the delivery of eco-system services to further improve the sound environmental resource management of EU farmland;

8. Believes that farmers are well placed to contribute to green growth and respond to the energy crisis through the development of green energy in such forms as biomass, biowaste, biogas, second-generation biofuels and small-scale wind, solar and hydro energy, which will also help create new green job opportunities.

These are exactly the reasons for which India and for that matter other developing countries are being asked to withdraw State support, and allow markets to deliver public goods.

[Source: Draft Report on the Future of Common Agricultural Policy after 2013 presented by Committee on Agriculture and Rural Development to the European Parliament on Mar 24, 2010]

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