Farmer’s protests. Trouble ahead for the EU supply chain?
In recent years, global events have created a paradigm shift in the food industry.
International conflicts, climate change and the different policies designed to mitigate its effect on the planet have created an uncomfortable situation for Europe’s farmers and producers.
For many months, our screens have come alive with scenes of large-scale agricultural demonstrations in major European capitals, from Brussels to Paris.
So, what are the major factors contributing to this widespread unrest?
Unfair competition?
The rising cost of fossil fuels is one of the main problems facing farmers, adding significant expense to their production processes.
At the same time, a large number of products from around the world have become more expensive and increasingly inaccessible.
This sharply increased financial burden has left EU farmers unable to compete with their non-EU counterparts. Creating an imbalance that EU farmers have flatly described as "unfair competition".
A principal grievance for the protests is centered around the lack of incentives and support from EU governments for their own produce. Which, in turn, has led to more favourable commercial agreements with external producers. These non-EU producers have a clear advantage: they can undercut prices within European markets thanks to an absence of the strict laws and measures imposed by the European Union.
Visible dissatisfaction
The intense dissatisfaction of European producers with the new CAP measures has been visibly demonstrated by massed protests and convoys of lorries blockading major European highways.
Several factors have strained the relationship between EU producers and governments. The elimination of subsidies for agricultural diesel and stricter conditions imposed by the European Green Pact have proved particularly inflammatory.
The reduction in fossil fuels subsidies has provoked anger among farmers throughout Europe, with Paris being at the very heart of these protests. Any increase in diesel prices adds to a considerable increase in production costs. Further reducing the producers’ already-slim profit margins.
Inflexible environmental measures and the excessive bureaucracy to which European producers are subjected has created a climate of unbearable tension. Chief among these controversial measures in the ruling that farmers should keep 4% of their arable land fallow. A significant impact on the productive capacity of their farms.
Another hackle-raising measure is the determination that, by 2030, the use and risk of synthetic chemical pesticides should be reduced by 50% and the use of high-risk pesticides by 50%. Local farmers argue that the punitive nature of this measure adversely affects both their production process and their ability to compete in foreign markets. Leading to a dramatic decrease in their productivity and a steep increase in the price of the products.
A sea of red tape
Excessive rural bureaucracy has emerged as a defining cause of agricultural protests in Europe. Farmers claim that they now "spend more time filling in forms than working in the fields”. Tied up in administrative knots, their productivity is compromised.
Their frustration has boiled over due to the difficulty of accessing CAP aid. They face a large number of formalities and processes before they are considered eligible for aid subsidies. Even after all that, the aid sometimes doesn’t arrive.
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The supply chain’s challenging future
Thankfully, we haven’t yet seen a shortage of European products in supermarkets. However, if the current conflicted situation continues over time, it could lead to a major blockage in the European food supply chain.
The limited ability to compete with products from outside the EU, the rising cost of raw materials and the bureaucratic suffocation to which European producers are being subjected will eventually lead (if these supply chains are not well managed) to a paralysis of the primary sector in Europe.
Throughout the supply chain, from farmer to consumer (or in current parlance, "from farm to fork"), a series of complex individual and collective interests are interwoven. This delicate relationship could be seriously damaged if the problems described above persist.
A ray of hope
There’s no doubt that a perfect storm of challenges and obstacles are making producers’ lives more complicated. At FoodExperts, we’ve created solutions that help simplify this complexity.
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To carry on the conversation or find out how FoodExperts can simplify your supply chain, feel free to contact us at [email protected]
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