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27/09/2016

TTIP: The downfall of EU agriculture?

Agriculture & Food

TTIP: The downfall of EU agriculture?

TTIP is an extremely divisive issue, particularly in Germany, where there is huge opposition to the proposed FTA.

[Mehr Demokratie/Flickr]

EXCLUSIVE / A new study has concluded that TTIP threatens to completely change the way small and medium sized farms operate, through the use of more genetic engineering and more hormone-treated meat. EurActiv Germany reports.

Europe’s farmers are in the midst of a crisis, with milk prices at rock-bottom, continuing EU sanctions against Russia and smallholders going under. But the knockout punch could still be yet to come, with the looming behemoth of TTIP, the planned free trade agreement between the EU and USA, on the horizon. If, as intended by negotiators on both sides of the Atlantic, standards in the agri-food industry are harmonised between the two trading blocs, then entire sectors of European agriculture could be endangered.

“No one can produce products like cereal as cheaply as the USA,” said a study on TTIP carried out by UnternehmensGrün, an association formed around green economy interests, seen by EurActiv before its publication. The study referenced the use of genetic engineering on a local level, weaker thresholds and larger production areas. “European farmers are, economically speaking, outgunned (…) it would mean the almost automatic downfall of parts of the agricultural sector.”

>>Read: Anti-TTIP petition signed by 3 million people

Currently, the trade in agricultural product and foodstuff exports to the USA total around €15 billion, with imports around the €8 billion mark. But, according to the study, this could all change if and when TTIP is finally negotiated and duties and non-tariff barriers are removed, with US companies gaining near-unlimited access to the European market.

The study relied on its own analysis and surveys of small and medium agriculturists to produce its findings. Its conclusion: “TTIP, in its proposed form, strengthens the position of the large agri-food companies, which already overcome trade barriers through the location of its production centres.” The very existence of 99% of small and middle-sized concerns has been ignored by the European Commission, argued the authors of the report.

Competitive advantage for USA

US farms find themselves in such a superior position not just due to their larger size, but also because of the lower consumer and production standards under which they are obligated to operate, according to the same study. A prime example is genetic engineering. In Europe, all food that contains greater than 0.9% GMO content must be labelled, whereas in the USA and Canada, no such requirement exists.

>>Read: EU farmers slam US over ‘technical barriers’ to trade

The USA has a markedly different attitude towards GMOs, where they are considered to be safe and are therefore produced at a cheaper cost. Due to this price advantage, European farmers would be forced to at least feed their livestock with GMO products, the end products of which are not governed by the same labelling requirement.

Conventional, GMO-free farmers could be squeezed out of the market, warned the study. Furthermore, the German government has legislation in the pipeline that would indeed obligate producers to label products such as milk, meat and eggs if they were produced using GMO feed. TTIP would complicate the adoption of such a law.

Hormones, pesticides and chlorine

The study also referred to the seemingly insurmountable differences between the US and EU agricultural markets, which on the other side of the pond is primarily aimed towards high-performance, exports and mass production, rather than our own focus on smaller-scale production for the domestic market.

>>Read: Antibiotic resistance looms as serious threat to health

The EU ban on growth hormones precludes the majority of US meat from sale in the bloc. This is particularly intended to protect local, conventional farming.  The US meat industry has long called upon Washington to eliminate this barrier within the TTIP negotiations.

The issue of pesticides is another area in which US farmers can gain an advantage. Legal pesticide-residue levels are around 5000% higher in the USA than in the EU. A different philosophy on food security is partly responsible for these divergent attitudes towards pesticide use. The European Commission approached the idea of increasing pesticide residue levels in draft proposals drawn up in 2015.

Then there is the matter of chlorine chicken, which has become a politically-charged buzzword and which highlights the fundamental differences between the two parties’ standards and requirements. While European producers must safeguard the security and hygiene of products through the entire food chain, US producers use chemicals such as chlorine dioxide at the end of the production chain to kill pathogens in poultry meat; a measure that the study says is both cost-effective and hazardous.

Regional agriculture under threat

The study picked out cereals, meat and milk as the main sectors in which European agriculture could be disadvantaged. A study about TTIP, produced by the Hungarian government and kept under wraps for around a year, concluded that regional farmers are set to be put under immense pressure by the FTA. Hungarian slaughterhouses that deal in poultry, cattle and pork products are threatened, as well as corn farmers and wine producers.

>>Read: Spanish farmers among least savvy about CAP

“The same goes for the major markets like Germany and Austria,” Katharina Reuter, head of UnternehmensGrün and co-author of the TTIP study, told EurActiv Germany. She called for the agricultural and food sectors to be taken off the TTIP negotiating table.

German farmers’ association sees TTIP as “great opportunity”

Peter Pascher, of the German Farmers’ Association (DBV), in contrast, does not understand TTIP’s detractors. “TTIP gives European producers the opportunity to access the US market, we hope for strong growth and momentum in the industry,” he told EurActiv Germany in an interview. Everything that is associated with so-called “Old Europe”, French cheese, German sausages, Italian pasta etc., has value on the Trans-Atlantic market. “That means: the more refined a product is, the better their sales prospects will be on the US market,” Pascher added.

>>Read: Time to reconsider EU sanctions against Moscow, say German farmers

The DBV represents around 280,000 members, more than 90% of German farmers. Peter Pascher is responsible for agricultural structure and regional policy. He wants to protect “sensitive” areas of European agriculture, in a similar vein to the provisions of the already-negotiated FTA between the EU and Canada, CETA. “We are calling for a limit on the import quotas of beef, pork and poultry, mainly due to the lower production costs enjoyed by the USA,” Pascher said.

He added that he does not believe that European regional and sustainable production will perish either.  “Regional production will not go out the window with TTIP, on the contrary: regional production is on the up in Germany. Also, US consumers appreciate products that have specific European characteristics,” he said. Pascher concluded by adding his voice to the numerous calls that geographical indications and protection is included within the final agreement.

Farmers’ association unrepresentative

Katharina Reuter expressed her doubts that the DBV had consulted its members extensively on the issue of TTIP in forming its opinions. “In many areas, such as the dairy sector, it appears that the association has long since stopped representing its members’ interests. Producing for the global market, trade as a miracle cure-all – these are not in the interest of small and medium-sized producers,” she said.

>>Read: 190 tonnes of illegal pesticides seized by Europol

The DBV has, however, an influential ally: the German government. The Federal Ministry for Food and Agriculture has been constant in its assurances that TTIP will not lower any standards in the agri-food industry. At the same time it has emphasised that Europe should take the opportunity that TTIP offers. Where market access is currently halted or hamstrung by red tape, exemption from duties and harmonisation of requirements could be engines for growth.

The ministry reiterated on its website that, “In parallel with the reduction in tariffs and other trade barriers, high German and European standards are to be maintained.”

EU to lose big time

So far, there are not a lot of studies that concern themselves with the potential effects of TTIP on agriculture. However, the large majority of the ones that have been produced predict nothing but a gloomy future for Europe’s farmers. A study carried out by the United States Department of Agriculture, which considered three different scenarios, concluded that American farmers are set to win out in the end.

>>Read: US official: America’s new food safety law ‘flexible’ for EU imports

Another study carried out in 2014 on behalf of the European Parliament came to a similar conclusion: agricultural value in the EU would fall by 0.5% as a result of TTIP and would increase by 0.4% across the Atlantic.

However, Peter Pascher was quick to point out that all the studies have been produced before TTIP has been negotiated or finalised, meaning the results have been based on a number of assumptions and urged its critics to wait.

Further Reading