Document 11
• Ref. Ares(2020)1566593-1'.YW2020
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EUROPEAN COMMISSION
DIRECTORATE GENERAL
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ECONOMIC AND FINANCIAL AFFAIRS
Investment, growth and structural reforms
Impact of EU policies on national economies
Brnssels,
ECFIN/B/ D(2020)
ANNEX TO REPLY OF DG ECFIN
AVAILABLE ON CIS-NET
Interservice Consultation launched by: SANTE
Be(ecence: 1scI2020I10394
Subiect: The Future of Food and Fanning
Contact Person ;n QG:
D
Approved
IZI
Approved subject to comments being taken into account
D
Negative opinion
We thank you for consulting DG ECFIN on the Communication "A Fann to Fork Strntegy",
which presents the general guidelines for the transition to a more sustainable primaiy sector in the
frainework of the European Green Deal.
DG ECFIN expects that the various actions included in the draft action plan will be accompanied
by an impact assessment analysing the economic, social and environmental impacts, possible
costs and benefits, investment needs as well as distributional effects. The Communication does
not assess possible ti·ansitional and pennanent costs of the vai·ious proposed measures for primary
producers. It does not consider either net-ti·ade effects with the potential substitution of EU
production by impo1ied goods due to potential rising production costs.
DG ECFIN has the following comments to the draft Communication:
1. The transition to a more sustainable primai·y sector will require mobilising investments,
which offers oppo1iunities but also entails ce1iain risks and costs. The second paragraph of
point 2.2 states that "Sustainability in the food system ( ... ) will attract investors and confer
competitive advantage, productivity gains and reduced costs to EU companies". It gives the
impression that the ti·ansition to this new sustainable paradigm will bring automatic benefits
without incmTing in any additional costs. This statement needs to be substantiated and
possibly nuanced. In this line of atti·acting investment, InvestEU should be mentioned in the
text as a way of fostering investment in the agro-food sector by de-risking investments made
in this area by European corporates as well as mid-caps and SMEs.
2. The text should describe better the possible transition costs incurred in the adaptation to a
more sustainable primary sector, especially for small producers and certain sectors that will
need to adapt to the new requirements proposed by this strategy, such as the livestock sector.
The primary sector experiences narrow margins and the transition to more sustainable
practices would have short-term impact on the operating costs. The last paragraph of point 2.1
refers to possible measures “to support primary producers in the transition” and cites briefly
changes in the competition rules and enhancing farmers’ cooperation in the CMOs. This
paragraph should be expanded and propose a comprehensive list of measures supporting
primary producers to facilitate a fair transition. This list of measures should also be better
articulated with the point 3 “Enabling the transition”, that proposes three key drivers, namely
(i) research and innovation, (ii) advisory services, data and knowledge sharing and (iii)
promoting the global transition. We suggest that all the measures proposed to facilitate the
fair transition should be ordered following the closeness to the primary producers and the
ease of implementation, i.e. with advisory services listed first.
3. The Communication should also better explain other possible risks such as higher prices in
the primary production due to rising costs. Higher prices of local production could increase
imports of non-EU products, especially when used as inputs of the food industry for further
transformation. Likewise, this rising demand for non-EU products could lead to less
environmentally friendly practices in these countries such as transforming forest area into
agricultural land to meet this rising demand.
4. Section 2.1 “Ensuring sustainable food production” proposes that the CAP post-2020, and
especially the eco-schemes integrated in the strategic plans, will contribute to the Green Deal
goals. We accept the introduction of specific environmental and sustainability targets to the
CAP, such as reducing the use of pesticides and antimicrobial as well as increasing the
surface under organic farming. However, ECFIN regrets that the targets and underlying
analysis are not provided, so that the level of ambition cannot be assessed.
5. This enhanced ambition for sustainability is likely to require changes in the monitoring and
evaluation framework. The introduction of the specific targets mentioned in the paragraph
above could involve additional administrative controls and data requirements from farmers,
member states and/or regions. The Communication should clarify these aspects. Likewise, it
should be better explained whether and to which extent the CAP proposal needs to be
modified to take into account this strategy.
6. The first paragraph of the third page states “EU farmer earns half of the average worker”.
This statement attempts to summarise with a single figure a complex issue that involves
sizable differences across countries, regions and sectors. Furthermore, it is no clear which
indicator is used (farm net value added per annual work unit? Remuneration of farm labour?)
to underpin this statement. This paragraph should be expanded to better explain the situation
and the indicators used for measuring income. In this context it is important to highlight the
substantial differences across countries and sectors in the level and evolution of farm income.
7. Finally, as an overarching comment to the whole draft communication, the references to the
sources of information should be systematically added, especially when referring to statistical
data or figures. For example, the footnote 6 presents GHG emissions from agriculture without
citing a reference. Another example can be found on page 5 where the statement
“antimicrobials provoke 33 000 human deaths” was not duly quoted.
Electronically signed on 13/03/2020 17:22 (UTC+01) in accordance with article 4.2 (Validity of electronic documents) of Commission Decision 2004/563