European consumers will have to pay more for food if proposed EU pesticides approvals legislation comes into force, a study by the European Centre for Agriculture, Regional and Environmental Policy Research (EuroCARE) suggests.
But it also indicates agricultural incomes would rise because of increased output prices and lower input costs.
Using a computer model that assesses the impact of political, socio-economic and environmental changes in the agricultural sector, the researchers found the loss of many critical pesticides would result in higher prices for all agricultural produce.
Wheat, for example, under the Commission’s proposals would increase by 20%, rising to 40% under if Parliament adds more cut-off criteria. Similarly, potato prices would increase by 20-33% depending on the proposal.
“The price increases forecast are not surprising, given the current pressures on food prices and the importance of the EU to international markets,” said EuroCARE’s Marcel Adenaeuer.
The model predicts that production of all agricultural products will fall in Europe, with some production being taken up by countries outside the EU. Indeed, under the Parliament’s proposals, it suggests the EU will become a net importer of wheat, rather than an exporter as at present.
Within the EU, cereals production will decrease because of other crops becoming more competitive, particularly potatoes, vegetables and permanent crops. Fallow land would increase because, with decreasing yields, marginal areas become more competitive.
Fodder areas would also increase significantly, but increased animal feed input costs would squeeze herd sizes.
However, under this scenario, the model also predicts gross margins for most crop activities would increase in the EU25 because rising prices, combined with cost reductions, would compensate for yield losses in terms of profitability.
For example, under the Commission’s proposals, cereals gross margins would increase by 12% across Europe, oilseeds by 9% and vegetables by 5%, although margins from other arable crops would fall by 5%.
Adding extra cut-off criteria as proposed by the EU Parliament would increase cereals gross margins by 14%, oilseeds by the same, but would cut other arable crops by 14%.
Beef farmers, however, would see a drop in gross margins of 4% under the Commission’s proposals and 12% with the Parliament’s additional restrictions.
“Based on these results, it follows that European farmers, on average, may frequently benefit from reduced plant protection in terms on income effects,” the report states.
But the rise in agricultural incomes comes at the expense of the consumer and processing industry, which has to spend more on agricultural products, it acknowledges.