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March 23, 2022

European Commission unveils Ukraine-linked support package for EU farmers

The Commission said it will also allow EU farmers to grow crops on fallow land during the crisis.

By Andy Coyne

The European Commission has announced a EUR500m (US$549m) support package to help European Union farmers most affected by the war in Ukraine.

EU member states are also allowed to top up those funds with their own resources.

The Commission said it will also allow EU farmers to grow crops on fallow land during the crisis, a temporary suspension of rules on greener farming practices.

Brussels said “short-term and medium-term actions” are intended to “enhance global food security and to support farmers and consumers in the EU in light of rising food prices and input costs, such as energy and fertilisers”.

It added: “The surge in global commodity prices, further accelerated by Russia’s invasion of Ukraine, highlights again the need for EU agriculture and food supply chains to become more resilient and sustainable, in line with the Farm to Fork strategy.”

The Commission stressed food availability is not at risk in the EU, since the continent is largely self-sufficient for many agricultural products but pointed out the bloc’s agricultural sector is a net importer of specific products, such as feed protein.

“This vulnerability, together with high input costs, such as fertilisers and fossil energy, is causing production challenges for farmers and risks driving up food prices,” it said.

Commission executive vice-president Valdis Dombrovskis added: “While the EU itself does not face a food security risk, we should still address food affordability issues and take steps to make our agriculture and food supply chains more resilient and sustainable to cope with future crises.”

The support package of EUR500m includes making use of the crisis reserve but may be topped up at a national level.

“On this basis, member states could provide additional financial support to farmers to contribute to global food security, or address market disturbances due to increased input costs or trade restrictions,” the Commission said.

“Support for farmers engaged in sustainable practices should be prioritised, whilst also ensuring that the measures target the sectors and farmers who are the hardest-hit by the crisis.”

The Commission will introduce “market safety-net measures” to support the pig-meat market in view of the “particularly difficult situation” of the sector.

Brussels will allow an “exceptional and temporary derogation” to allow the production of any crops for food and feed purposes on fallow land, while maintaining the full level of the greening payment for farmers. “This will enlarge the EU’s production capacity in spite of the limited availability of fertile land,” it said.

The Commission has also proposed a new, self-standing Temporary Crisis Framework that also covers farmers, fertiliser producers and the fisheries sector. This allows state aid to farmers affected by significant increases in input costs.

To improve the affordability of food, EU member states may also implement reduced rates of VAT and “encourage economic operators to contain retail prices”.

Member states can also draw from EU funds such as the Fund for European Aid to the Most Deprived (FEAD), which supports EU countries’ actions to provide food and/or basic material assistance to the most vulnerable.

Dirk Jacobs, director general of EU food manufacturing trade body FoodDrinkEurope, said: “The war in Ukraine has exacerbated rapidly increasing energy costs, pressures on the food supply chain and rising agricultural raw material and food prices. It is therefore good that the European Commission has taken decisive action with its range of emergency measures for farmers and consumers today, but it must be ensured that companies in the food and drink manufacturing sector, with its many SMEs, can also have access to the appropriate support and assistance, where needed, so that they can continue to supply.

Jacobs also raised the importance of the EU’s European Green Deal and the bloc’s Farm to Fork Strategy. The European Green Deal is the EU’s bid to move to a sustainable economic model.

Under the plan, presented in 2019, the bloc is aiming to have no net emissions of greenhouse gases by 2050 and to have economic growth decoupled from resource use.

As part of that plan, the EU’s Farm to Fork Strategy aims to create a more sustainable food system, including having what the bloc calls “a neutral or positive environmental impact”; helping “to mitigate climate change and adapt to its impacts”; and “reverse the loss of biodiversity”.

“FoodDrinkEurope is convinced that, while due recognition should be given to the challenging times many companies are facing these days, in the medium- to long-term, the objectives of the European Green Deal and the Farm to Fork Strategy remain valid and necessary to ensure the resilience and sustainability of Europe’s food systems. We see no contradiction in food sustainability and food security; on the contrary, food sustainability and food security must go hand-in-hand.”

The Commission, meanwhile, said it is also supporting Ukraine in developing and implementing a short- and medium-term food security strategy to “ensure that inputs reach farms where possible, and that transportation and storage facilities are maintained to enable Ukraine to feed its citizens and to eventually regain its export markets”.

“An EU Emergency Support Programme of EUR330m for Ukraine will help to secure access to basic goods and services, as well as the protection of the population,” it said.

Copa and Cogeca, the twin organisation which represents farmers and agri co-operatives respectively in the EU, said it welcomed the support for Ukraine and the Commission’s derogation to the “ecological focus areas … such as the mobilisation of fallow land”.

However, a statement from the organisation continued: “The complete lack of short-term proposals to relieve tensions on the fertiliser market is regrettable. This market is currently experiencing unprecedented turmoil, with historic high prices and a proven risk of shortages in the coming season.”

Christiane Lambert, the president of Copa, added: “Despite the caricatures and twists of our positions over the past months, particularly in the context of the Farm to Fork Strategy, we have always supported the necessary sustainability approach to agriculture and food. We must continue to produce quality and affordable food in Europe in quantity and I am convinced that we can do so in an increasingly sustainable way. The accumulation of crises also shows us that we need to seriously address our dependencies on fertilisers, animal feed and fossil fuels. The options and solutions exist in agriculture to show that we can reconcile productivity and sustainability.”

For more on Just food’s coverage of how the conflict is affecting the food industry, please visit our dedicated microsite.

Understand the impact of the Ukraine conflict from a cross-sector perspective with the Global Data Executive Briefing: Ukraine Conflict.

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