Impact of COVID-19 on Agriculture

EU, U.S. Face Feeding the World With Differing Ag Policies

Newsroom / January 12, 2014

SAN ANTONIO, January 13, 2014 – While the European Union and the United States are together feeding the world, their agriculture policies differ, the EU’s Agriculture Counsellor Giulio Menato told workshop attendees at the American Farm Bureau Federation’s 95th Annual Convention.

The European Union has 13.7 million farms, Menato said. About 70 percent of those are less than 10 acres and 92 percent are family farms. Those farms employ 17 million people and comprise 6 percent of the EU’s gross domestic product.

With 50 percent of Europe’s land area devoted to agriculture, “We have a different reality in Europe,” than the much larger U.S., Menato noted. With a higher population density, “The [European] population has a strong relationship with the countryside.” The side-by-side coexistence of urban and rural means they share the same air, water and other natural resources, which prompted EU policymakers to actively engage the public as it formulated modern ag policy. Recent droughts and price volatility “scared” European consumers, Menato said, and those fears increased public interest in ag policy.

Menato said the three overriding policy goals are viable food production, sustainable management of natural resources and balanced development. Government’s role, he noted, is to incentivize farmers, not provide subsidies. Roughly one-third of EU direct payments are dependent on three areas: maintaining permanent pasture/grassland; crop diversity; and maintaining “ecological focus” areas of at least 5 percent of the farmer’s land.

“Europe is a price taker,” Menato said, which pushes farmers to maximize what they can get for their product. This means farmers are encouraged to move from bulk commodity production to specialty products identified with regional agriculture. Policymakers are working to protect origin, history and product names, he said, “because the consumer wants authenticity.”

“These kind of products provide real jobs” for skilled workers who market, advertise, transport and sell specialty products, Menato said. Regional agriculture also helps drive tourism and investment, which lead to more jobs. The United States and other nations are welcome to invest in European ag ventures, Menato said, but production will take place in Europe rather than in the investor nation.

Menato said EU ag policy dictates that the safety net be a “real safety net,” and not hiding another support. He said farmers are expected to cooperate with each other in order to improve their position in the market. The state is ready to provide support in the event of major market drops, but farmers “must assume risk.” Less than 10 percent of the EU’s ag budget is earmarked for market intervention.

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