USDA Economic Research Service Examines Economic Impacts of EU’s Farm to Fork Strategy

By November 2, 2020December 14th, 2020News Posts

Farm to Fork strategyThe European Commission’s Farm to Fork strategy and Biodiversity strategies are the focus of a new economic brief from the USDA’s Economic Research Service (ERS).

It examines three adoption scenarios – EU-only, middle (adoption by some countries, with explicit EU trade restrictions against non-adopters), and global adoption – and finds that the EC’s 10-year plan of targeted reductions in the use of land, antimicrobials, fertilizers, and pesticides would lead to a reduction in EU agricultural production and reduce its competitiveness in domestic and export markets. If the plan were adopted beyond the EU, worldwide welfare and food insecurity would also be compromised.

The report finds that by 2030:

  • The decline in agricultural production in the EU would range from 7 percent (global adoption) to 12 percent (EU-only). Impacts on production would be smaller worldwide, except in the case of global adoption, when production would decline by 11 percent.
  • The decline in agricultural production would constrict the EU food supply, resulting in price increases. Prices and per capita food costs would increase the most for the EU. For the United States, price and food costs would remain relatively unchanged except in the case of global adoption.
  • Production declines in the EU and elsewhere would lead to reduced trade, although some regions would benefit depending on changes in import demand. However, if trade is restricted as a result of the proposed measures, the negative impacts are concentrated in the world’s most food-insecure regions.
  • The declines in production and trade, coupled with the projected increases in food commodity prices, would significantly reduce EU GDP, especially if adoption was limited to the EU. The effects on the GDP of the United States would be smaller than for the EU and worldwide under all adoption scenarios.
  • Food insecurity, measured as the number of people who lack access to a diet of at least 2,100 calories a day, increases significantly in the 76 low- and middle-income countries covered in ERS’ analysis due to increases in food commodity prices and declines in income, particularly in Africa. By 2030, the number of food-insecure people in the case of EU-only adoption would increase by an additional 22 million more than projected without the EC’s proposed strategies. The number would climb to 103 million under the middle scenario and 185 million under global adoption.

Read the “Economic and Food Security Impacts of Agricultural Input Reduction Under the European Union Green Deal’s Farm to Fork and Biodiversity Strategies” report summary, and download the report.

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