04. January 2021
EU Agricultural Outlook Conference 2020
What has happened in EU agriculture?
“Farmers became a symbol of resilience during the Corona crisis” those were the opening words of Ursula von der Leyen on the developments in EU agriculture in 2020. The President of the European Commission started the EU Agricultural Outlook Conference 2020 with clear words on December 16, stressing that Corona should not be a reason to limit agricultural environmental measures.
By Laura von Ketteler
Farmers play an important role when it comes to protecting ecosystems, nature and biodiversity. With the goal of making the EU the first CO2 neutral continent in mind, von der Leyen advocated supporting farmers who are willing to act in an environmentally friendly way. Eight billion euros will be spent by the EU Parliament to support European agriculture in 2021 and 2022, it was decided this December in the Parliament. This money will go mainly to young farmers and farmers who are open to change and environmentally friendly systems.
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Trends in EU agriculture 2020
Agricultural news in 2020 was dominated by kilometer-long tractor demonstrations in front of the Brandenburg Gate and the gates of Lidl and ALDI, the Tönnies scandal and, of course, the Corona crisis. The latter was the central topic of this year’s virtual EU conference. Discussion topic number one of the farmers, politicians, entrepreneurs and co: the trends that have emerged in 2020, particularly influenced by the Corona pandemic, and what the EU has learned from the crisis. In any case, the consensus of numerous participants was that the food industry has already shown enormous resilience in the past year. “Through the EU-wide introduction of Green Lines, the import and export of raw materials or foodstuffs was secured relatively quickly” announced the Commissioner for Agriculture and Rural Development Janusz Wojciechowski. However, the resilience and flexibility of the food system still need to be further strengthened in order to be able to withstand future crises even better. In general, we can see a reinforcement of some pre-crisis trends rather than a complete overhaul of the food system.
Changing consumer behavior
Over the past year, the primary change has been in consumer demand. As a result of the Corona crisis, supermarket purchases and online grocery shopping have increased dramatically. Simultaneously with a growing demand for online products, the demand for regionally produced food also increased. Consumers are showing a greater awareness of the origin of products and the transparency of the value chain. Farmers increasingly responded by setting up online direct marketing concepts.
Frischepost is one of the companies that has benefited from last year’s developments, as it addresses three consumer needs: Regionality, transparency and the possibility of online ordering. “We clearly see that awareness of regionality is steadily increasing. Because of Covid-19, our private customer orders have increased more than sixfold. Customers stay at home, appreciate the delivery service and are happy that they can support regional, sustainably producing farms and businesses with us” says Frischepost co-founder Juliane Willing.
Food purchases in supermarkets have increased by up to 18% in some cases, as people stopped eating out and saved extra money at one corner or another. Supermarket chains such as REWE were quick to respond to the change in demand from their customers and are greatly expanding their regional network with producers and suppliers. At the same time, purchases of hygiene products such as shampoo and deodorant declined. Nutritional value and health aspects have become even more important factors in consumer choice, along with the environment and climate change. This includes a change in meat consumption towards less pork and beef, slightly more chicken and, above all, growing popularity of EU-produced plant-based products such as soy, peas and lentils. The vegetable and fruit market also benefited from increased demand for healthy and unprocessed foods.
In this context, the sustainability aspects of EU agriculture and food production were strengthened in the political discussions on the future of the Common Agricultural Policy and the implementation of the objectives of the European Green Deal and the Farm-to-Fork concept.
Effects on the market
Although the impact of the crisis on the food market was nowhere near as drastic as in the financial crisis, it was noticeable in one area or another. According to the FAO, the limited damage can be attributed to the AMIS system that was enacted at the time, a platform to improve the transparency of the food market. In some food sectors, product prices dropped significantly during the crisis. Cattle prices, for example, crashed to multi-year lows earlier this year. This was due to the closure of food service operations. This could not be remedied even by diverting beef to grocery stores or direct marketing.
But long-term trends also became apparent last year. Cultivation systems such as regenerative agriculture and agroforestry found more enthusiastic and experimental supporters across Europe last year. These include humus buildup and CO2 certificate trading as an investment opportunity. Covid-19 and the loss of seasonal workers have also driven the issue of agricultural automation even more than before.
Auditor and consulting firm Deloitte concluded by summarizing the following trends: Health, Consumer Awareness, Climate, Farmer Protests and Tech Investments. The conclusion of the conference: to make supply chains even more stable in the future, they must become shorter and more flexible.