On 6/24/19, the European Commission published the final report of the ‘High Level Forum on the Better Functioning Food Supply Chain‘. Good intentions on fair business practices, efficiency and competitiveness, transparency in the value chain. From words to deeds, some unresolved issues.
EU-Italy agribusiness supply chain, the data
Overall, the food supply chain employs 19 percent of the workforce in Europe, nearly 44 million jobs out of a total of 227 (Eurostat). 22 million employed in agriculture, 4.6 in processing, 7 in distribution. There are about 15 million enterprises, including 11 million in agriculture, 300,000 in processing, 2.8 million in distribution, and the remainder in services. (1) SMEs account for 99 percent of enterprises, 48 percent of industry turnover.
The total turnover of the EU food supply chain amounts to 3.7 trillion euros. Distribution takes the lead (€1,128 billion retail, 1,032 wholesale), followed by the processing industry (€1,115 billion) and agriculture (€462 billion). The total value added is over €707 billion (gross), accounting for 5 percent of the total value added in the EU (2015 data, FoodDrinkEurope). (2)
Trade in agri-food commodities with third countries reached a record €255 billion in 2017. This confirms the EU as the world’s leading area for import-export of agri-food products, with exports amounting to 138 billion euros and a net trade surplus of 21 billion. (3)
Italian agriculture ranks first in Europe for value added, estimated at 32.2 billion euros (2018, Eurostat). Followed by France (32.1 billion), Spain (30.2) and Germany (16.8). In contrast, the Italian food industry maintains third place in the EU (€133.1 billion in sales), after France (€179.8) overtook Germany (€171.3). This was followed by England (€118.2) and Spain (€96.4). The five countries express 66 percent of European industry turnover (2018, Eurostat).
Food supply chain, the High Level Forum
The ‘High Level Forum for a Better Functioning of the Food Chain‘ (HLF) was established in 2010 by the European Commission and consists of 50 members. Including 48 full members-representing member states (28) and European federations of various industries and sectors (22)-and 2 observers (European Parliament and Norway). The plenary assembly is convened once a year to adopt the program and validate the work conducted by the Sherpa group, the expert group that prepares documents and positions with the support of the secretariat (European Commission).
In its first 4 years , the Forum essentially recorded the exacerbation of already known and unresolved problems, exacerbated by global economic crises. With further injury to local agricultural supply chains, plagued by, among other things, the socio-environmental dumping of planetary competition. HLF Report 15.10.14 provided a number of recommendations, recognizing the need for a holistic approach to ensure coherence among policies that variously affect the food supply chain. (2) The Forum was then granted a new mandate in 2015, which will expire on 12/31/19. Nine focus areas were defined: competitiveness, B2B business practices, internal market, market access and trade, sustainability, social dimension, innovation, pricing, and future challenges affecting competitiveness.
Four areas of work have been focused on in the current mandate of the Forum. With the aim of promoting necessary reforms, where self-regulation proves unsuitable, on the following issues:
– Fair and efficient business practices,
– Competitiveness and new opportunities in the single market. With a focus on digitizing the supply chain,
– Transparency of the value chain. An indicator on price composition, ‘FoodEuro,’ will be introduced by the end of 2019, (3)
– differences in composition between products of the same brand and similar appearance, sold in different member countries (
Dual Quality Food
).
High Level Forum, the report 24.6.19
The 24.6.19 report of the High Level Forum for a Better Functioning of the Food Supply Chain focuses on two orders of recommendations,
– How to address the barriers plaguing the domestic market in the agribusiness supply chain,
– Analysis on the proportionality of cases of different compositions in identically labeled products(dual quality food).
The smooth functioning of the domestic market is the focus of the Forum’s attentions, of course. (4) Thanks to the ‘single market’-in the European narrative, echoed in the latest HLF report-Europeans ‘can buy the food they want, where they want, and benefit from greater choice and lower prices.’ (2) The single market would thus guarantee European citizens ‘freedoms and opportunities‘. In a perspective of freedom and standard of living that is, however, in the writer’s opinion, short-lived.
‘This Forum would like to send a strong message. The time has come to put an even stronger emphasis on the Single Market for food. Not for its own sake. But for the sake of our industrial economy, for the sake of high quality products, for the sake of consumer choice and for the sake of our future living standards.’ (2)
From words to deeds, it is imperative to restore balance in a supply-chain that has seen the emergence of modern distribution in just a few decades, now joined by ecommerce. Concentrated powers that still dominate an extremely fragmented production chain, on which looms the additional threat of tariff elimination on agricultural commodities made in third countries without rules to protect workers and the environment.
Sustainability and new GMOs
A veritable ‘climateapartheid ‘ threatens to erase the even slight progress made in recent decades on the sustainable development and anti-poverty fronts. (5) The food supply chain remains one of the economic sectors with the greatest impact on the environment due to direct land consumption and effects on ecosystems as well as global and regional supplies of carbon, nutrients and water. (6) Andagroecology stands today as the only real solution to follow, in Europe and the world
‘The debate on how to combine humanity’s environmental efforts with growing nutritional needs is without exaggeration one of the most important and urgent problems facing our planet.’ (2)
The Forum acknowledges the problem but instead of considering the real solutions-which science identifies in a systematic approach-proposes a false Atlanticist solution, the de-regulation in Europe of new GMOs(plant breeding techniques or gene editing). In a logic that neglects the precautionary principle and biodiversity, favoring instead the global monopolies of agrochemical giants. Whose interests clearly do not coincide with those of the 22 million workers in the European agricultural supply chain.
Origin labeling and obscurantism
Origin-Made in and origin of raw materials-is brought forward by the relevant social partners, in Europe, for the specific purpose of encouraging informed purchasing choices in every transaction, B2B and B2C. With a view to prioritizing the procurement of goods that come from fair and sustainable supply chains, that is, ones that respect workers, rural communities and the environment. As well as ensuring transparent labels, in line with consumers’ expectations and their increasing focus on short supply chains.
‘Gastronationalism ‘ is the unfortunate crasis invoked by members of the ‘High Level Forum’ to downplay this phenomenon and frame it, scornfully, as a resurgence of indigenous European consumer instincts. (7) This overlooks the socio-economic and employment value related to the development of domestic demand on goods produced in the territories, as well as the implications on the sustainability front. In the name of the neo-liberal dogma of global trade and Free Trade Agreements, which is just now going to be defined with the U.S.(TTIP) and the Mercosur countries, global champions in the production of food commodities in competition with those of Europe.
‘While there is clear empirical evidence at an aggregate level that trade offers multifaceted consumer benefits, individual consumers cannot clearly see them and often lack information on the origin of imported goods and the lower prices brought about by new trade policy initiatives.’ (2)
International partnership agreements are bound to upset the balance of economies structured over centuries with fierce instantaneity. Without anyone having previously assessed their potential impact on individual industries or entire supply chains, regional and national economies. And there will be no turning back, having ceded national sovereignty and regulatory power in areas such as competition and market protection, procurement, and labor.
Short Food Supply Chains (SFSCs) vice versa elude the ‘High Level Forum for a Better Functioning Food Supply Chain‘ as much as European policymakers. Although nearly nine out of ten European consumAtors support strengthening the role of farmers in the food supply chain (Eurostat, 2018). The European Commission itself has gone so far as to admit that to date food supply chains ‘rarely benefit farmers,’ who are crushed by unfair trade practices. (8) But neither the CAP and other European nor national policies have yet considered small-scale production andpeasant agriculture.
#Égalité!
Dario Dongo and Giulia Torre
Notes
(1) https://ec.europa.eu/info/sites/info/files/food-farming-fisheries/farming/documents/factsheet-food-supply-chain_march2017_en.pdf
(2) https://ec.europa.eu/DocsRoom/documents/7194/attachments/1/translations
(3) https://ec.europa.eu/docsroom/documents/36063
(4) TFEU, Article 28.1. ‘The Union comprises a customs union covering all trade in goods and entailing the prohibition, among member states, of customs duties on imports and exports and of any tax of equivalent effect, as well as the adoption of a common customs tariff in their relations with third countries.’
TFEU, Article 34. ‘Quantitative restrictions on imports as well as any measure having equivalent effect shall be prohibited among Member States.’
TFEU, Article 35. ‘Quantitative restrictions on exports and any measures having equivalent effect shall be prohibited among member states.’
(5) https://www.theguardian.com/environment/2019/jun/25/climate-apartheid-united-nations-expert-says-human-rights-may-not-survive-crisis
(6) The same report states: ‘Globally, food production contributes to climate change through the emission of greenhouse gases and the reduction of carbon storage in vegetation and soil. Locally, monoculture can reduce biodiversity and affects natural habitats through land conversion, eutrophication, pesticide inputs, irrigation and drainage. Unsustainable agricultural practices can also lead to direct environmental consequences such as soil erosion and loss of pollinators.’ (see note 4)
(7) The term ‘gastronationalism’ seems to be coined in 2000 by Dr. William Swart J. (Augustiana University, Illinois, USA), during his studies in sociology. Later developed by Michaela De Soucey (2010)
(8) For some useful insights into the inattention of European policies on short supply chains, see https://www.euractiv.com/section/agriculture-food/opinion/europe-must-get-serious-about-short-food-supply-chains/
Dario Dongo, lawyer and journalist, PhD in international food law, founder of WIISE (FARE - GIFT - Food Times) and Égalité.
Graduated in law, master in European Food Law, she deals with agro-food, veterinary and agricultural legislation. She is a PhD in agrisystem.
