EUROPEAN AGRICULTURE OF THE FUTURE:

THE ROLE OFPLANT PROTECTION PRODUCTS (PPPs)

EUROPEAN AGRICULTURE OF THE FUTURE:

THE ROLE OFPLANT PROTECTION PRODUCTS (PPPs)

Press ConferenceBrussels, October 9th 2008

Stefano BaldiResearcher

“Agriculture and Food Unit” Nomisma

PRESS CONFERENCE 24/01/2008 2PRESS CONFERENCE 09/10/2008 2

The evolution of the PPP regulation framework: effects on PPP availability

* Source: EU-DG Health and consumer protection (Update 11/08/2008)

Proposal for New Regulation replacing Dir. 91/414/EEC

The proposal contains some conditions (cut-off criteria, comparative assessment, data protection) which could substantially reduce PPP availabilityAccording to the Pesticides Safety Directorate (UK) impact assessment, the reduction in available active substances (cut-off criteria + candidates for substitution) could be:

• 31% based on the Commission Proposal• 82% based on the European Parliament Proposal

Already, 91/414/EEC has been reducing the number of PPPs included in the positive list (20% of 1,061 active substances (ASs) evaluated were

approved, while 64% were excluded and 16% are still pending)*

The impacts of the new regulation:case studies

Reduced availability of PPPs in EU-27 could generate impactsover long term (2020)

New regulation effects + availability of new PPPs due to R&D activity of PPP Industry

Reduced availability of PPPs in EU-27 could generate impactsover long term (2020)

New regulation effects + availability of new PPPs due to R&D activity of PPP Industry

Static evaluationStatic evaluation

yield reduction

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The impacts of the new regulation:European production trends

135 Mil t.

179 Mil hlt.

64 Mil t.

293 Mil t.

Present situation (2006)

Taking into account general economic trends, the impact of the changing regulation framework could contribute to production drops of between 30-25% in wheat and cereals, with an even higher negative impact on potatoes (50%), and around a 7% reduction in wine output

Present situation

New regulation

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The impacts of the new regulation:European self-sufficiency trends

119%

105%

102%

104%

Present situation (2006)

Taking into account general economic trends, the impact of the changing regulation framework could contribute to a loss of self-sufficiency, generating a dependence on foreign suppliers in all case studies

Present situation

New regulation

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Reduction of EU-27 agricultural self-sufficiency: impacts on the European economic system

Reduced self-sufficiency in agriculture generates negative effects on the Agri-food sector

and the overall economic system

Loss of Competitiveness

Food safety and quality as main

success factor of European food

products in internal and extra–EU

markets

Loss of Competitiveness

Food safety and quality as main

success factor of European food

products in internal and extra–EU

markets

Safeguarding of European model

Preservation of income and employment in

agri-food and related sectors (retail trade, services, transport,

energy, machinery).Multifunctionality of agriculture in rural

areas

Safeguarding of European model

Preservation of income and employment in

agri-food and related sectors (retail trade, services, transport,

energy, machinery).Multifunctionality of agriculture in rural

areas

Guarantees of food safety and qualityHigh integration between agriculture and food industry:•Production model respects high hygienic, safety and quality standards;•Typical products•Traceability

Guarantees of food safety and qualityHigh integration between agriculture and food industry:•Production model respects high hygienic, safety and quality standards;•Typical products•Traceability

Increasing deficit in agricultural trade balance(+20% 1999/2006)

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In this context,the European Agri-food sector could face ...

Rising commodity and food prices

Loss of international competitiveness

Jeopardises the availability of safe, high quality, locally produced food

Inability to take advantage of new market opportunities

Reduced world export share

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Thank you for your attention

Stefano Baldi

Researcher at Nomisma“Agriculture and Food Unit”

Thank you for your attention

Stefano Baldi

Researcher at Nomisma“Agriculture and Food Unit”

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Impacts of the new regulation framework:the methodology

High variability of EU-27 agriculture

How much do PPPs affect crop yield?Organic production is an agricultural system which uses the lowest quantity of PPPs (some “natural” PPPs permitted). Nomisma assumes that crop yields without using PPPs will be the same as those registered in organic agriculture (conservative approach)What is the impact of the changing regulatory framework on crop yields?For each crop, a reduced availability of PPPs results in a yield drop to a level between current yield and organic yield. The study provided estimates of yields within this range over the medium term (Dir. 91/414 impact) and over the long term (New regulation replacing Dir. 91/414). The evaluation takes into account the effects of ongoing innovation in the R&D activities of the PPP Industry How this phenomenon impacts on general crop trends?The impact assessment over the medium-long term also needed to take into account general trends for the main variables (yield, cultivated area, production, domestic use, import-export). Thus a dynamic evaluation (scenario analysis) was conducted by Nomisma for each crop, thus allowing analysis of the effects of individual PPPs on yields within a general dynamic context

Empirical approach

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World economic trendscould exacerbate these developments

Increasing world demand for commodities and food•High growth in emerging economies (positive demographic and income trends) generates rising demand for food and, increasingly, for healthy and quality food•Increasing non-food use of agricultural raw materials (biofuels)Growing competition• Progressive trade liberalisation (WTO)• New global players in food production and trade (lower labour cost and consequently lower prices than in Europe)

Possible market shocksin the future

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Technological inputsFertilisers, Seeds, Plant Protection Products,

Veterinary products, Machinery, etc.

Technological inputsFertilisers, Seeds, Plant Protection Products,

Veterinary products, Machinery, etc.

Related sectors

Retail trade, services to companies,

financial activities, transport, energy,

chemicals, machinery

Related sectors

Retail trade, services to companies,

financial activities, transport, energy,

chemicals, machinery

EU marketHigh requirements for food safety and quality

(requested by citizens & consumer policy)

EU marketHigh requirements for food safety and quality

(requested by citizens & consumer policy)

Extra-EU marketGrowing demands for food safety and quality (mature markets and emerging economies)

Extra-EU marketGrowing demands for food safety and quality (mature markets and emerging economies)

AgricultureAgriculture

Availability of Raw Materials(guarantees of safety and quality)

Processed food(guarantees of safety and quality)

Agri-food

sector

Agri-food

sector

Global challenges

Market liberalisation

andcompetition,demographic

changes, attention to health and

food quality, environment,

bioenergy

Global challenges

Market liberalisation

andcompetition,demographic

changes, attention to health and

food quality, environment,

bioenergy

Food IndustryFood Industry

Main PPP links to the agri-food sectorand the overall economic system