A meeting of the AGRI Committee took place on Tuesday, 15 June 2021 with Daniel Buda (PPE, RO), replacing Mr. Lins (PPE, DE), in the Chair.
Point 4 was dedicated to the presentation of a study for the AGRI Committee on the “Preliminary impacts of the COVID-19 pandemic on European agriculture: a sector-based analysis of food systems and market resilience” commissioned by the Policy department for structural and cohesion policies. The study was presented by Messrs Francesco Montanari (Arcadia International), Axel Wion (VVA) and José Diogo Albuquerque (Agroportal).
Among the many issues raised by the study (including the resilience of the EU food-chain and the internal market, the sectoral impacts of the Covid-19 pandemic and the EU and Member States’ interventions), questions from MEPs focused on the State aid schemes and their possible competition distortion effects, the long-term impact of the pandemic on consumption patterns (notably an increase in demand for healthy and locally produced food products) and the need to improve the CAP toolbox to mitigate the effects of similar crises in the future (this would include in particular more flexible market measures and an increase in the commitments allocated to the reserve crisis and the need to make it independent from direct payments). In their interventions, Members also raised concerns on the most affected sectors (wine, beef, plants and cut flowers) and the importance of food assistance (with new programmes possibly tailored on the U.S support schemes).
The main conclusions of the study:
- Overall, during the pandemic, the EU agri-food supply chain has demonstrated a high degree of resilience. The value of the output of the agricultural industry declined by 1.4% in 2020 compared to 2019. Nonetheless, sectors highly dependent on the food service (e.g. wine, beef and veal) have faced major difficulties. Flowers and plants and sugar have also suffered considerable financial losses.
- The EU response was highly effective in preserving the integrity of the Single market. Conversely, measures adopted under the Common Agricultural Policy (CAP) had mixed results having been implemented partially or inconsistently across Member States (MSs).
- The costs of the crisis for the EU agri-food sector will be borne primarily by MSs. National financial support – namely in the form of State aids (estimated EUR 9 billion) and other instruments – has been significantly higher than EU support (EUR 80 million in private storage aids).
- To better respond to future crises, policy responses should be designed following a ‘food systems approach’. Moreover, the reasons behind the limited impact of CAP measures during the pandemic should be better investigated. Consideration should also be given to the decoupling of the CAP crisis reserve from farmers’ direct payments to reinforce EU financial capacity during crises. Finally, because of the economic consequences of the pandemic, food assistance programmes for the most deprived are needed.
Further reading: Preliminary impacts of the COVID-19 pandemic on European agriculture: a sector-based analysis of food systems and market resilience
Watch video of the event (with multilingual interpretation):