A new report from farmers’ association COPA-COGECA outlines the multi-faceted ways in which COVID-19 is leaving its mark on the agricultural sector, from flower growers to meat producers.
The report, which was presented on Wednesday (25 March) at the AGRIFISH Council, represents a non-exhaustive compilation of contributions from national member organisations across the EU.
“Farmers, forest owners and their cooperatives are facing an increasingly difficult situation and causing dramatic consequences in the most affected rural areas of the EU,” the report states, the effects of which are likely to be felt in the “medium to long term.”
The report analyses each agricultural sector in turn, singling out the nursery stock, flower and bedding plant sector as one of the hardest-hard, with current sales below average by at least 60-70%.
The meat sector is also facing multiple coronavirus-linked challenge and insists that consumption has “dramatically decreased” due to foodservice closures, such as hotels, restaurants and catering.
Although the dairy market has remained relatively calm, COPA-COGECA detected several signs of potential disturbance, as processors have lost some of the processing channels and are forced to find alternative markets outlets, which has been increasingly difficult.
The slowing down of exports together with concerns over access to labour are creating an excess of both wine and olive oil in the run-up to the next harvest marketing year.
For wine this may imply a significant drop in price and/or reduction in grape purchases in the next marketing year, the report warns.
Furthermore, demand for processed products for the supermarket is high, while consumers are buying fewer higher value cuts or seasonal products such as lamb.
Changing consumer preferences are also causing effects in other sectors, notably the increase in consumer demand for wheat products such as flour, bread and pasta, which is putting pressure on the processing industry, which is increasingly struggling to obtain supplies as quickly as is required.
After an initial peak in demand, the market for fruit and vegetables has weakened and prices are falling. Closure in the HoReCa sector (hotels, restaurants and caterings) have also created a critical situation.
But the Commission informed ministers that the demand in the fruit and vegetable market is expected to stay strong during the containment period.
The report concludes that the sector’s eligibility must as a result be secured under the Corona Response Investment Initiative to provide new additional funding resources in these clearly exceptional circumstances.
Common Agricultural Policy
The report also calls on the Commission to extend the flexibilities offered for the application period for direct payments to rural development measures and to increase the maximum rate of advance payments.
As well as allowing a more lenient approach to deadlines, it also concludes that simpler procedures and derogations from some of the obligations “must also be considered in order to avoid the risk of diminishing the production potential.”
But they also stress that this flexibility in managing measures and using simpler procedures should not compromise timely payments of this support to farmers, who are in a situation where their cash-flow will be “seriously reduced.”
One year transition ‘not enough’
Referring to the transitional regulation that must be put in place to ensure that farmers have a smooth and stable transition from this year’s CAP to the next, the report states that the length of the transition will be “crucial”.
“We believe that the one year transition proposed by the Commission is not enough,” it said, suggesting instead that we should have a transition period that lasts “no longer than two years in order to allow a smooth transition to a new delivery model”.
“In the medium term, it is fundamental to reflect on the position and role of the CAP in European policies. Both society and decision-makers must understand the crucial role that the agricultural sector plays in delivering safe, affordable, nutritious food in sufficient quantities to consumers.”
“Consequently, the necessary public support must be granted to these policies,” it concluded.
Access to labour
The report stresses that the industry is already facing “major employment challenges” due to the restrictions on the movement of workers, and this is something that they predict will continue over the course of the next few weeks.
“EU farmers are increasingly dependent on seasonal workers who provide valuable assistance during peak planting, pruning and harvesting periods or for other farm-related work. Recent restrictions on intra-EU movement of skilled workers have already had a major impact on seasonal planning.”
The report emphasises that the consequences of this will be seen “throughout the whole year and beyond 2020”.
That is why it also calls for the “movement of seasonal workers between regions and member states to be maintained while at the same time meeting the necessary public health requirements”, although how this could be currently implemented remains to be seen.
[Edited by Gerardo Fortuna and Sam Morgan]