China has initiated an investigation into the dairy subsidies provided by the European Union and several of its member states.

The investigation could reshape the global dairy trade landscape with increased trade tensions potentially benefitting dairy exporters from Australia, New Zealand, the United Kingdom and the United States, according to a new report by Rabobank.

The investigation focuses on the EU’s Common Agricultural Policy and national plans of eight countries and is in response to the European Union’s decision to hike tariffs on Chinese electric vehicles.

However, market impacts are unlikely to be felt until at least 2026 – if at all. 

The report,  Navigating Trade Tension: Potential impacts of China’s probe into EU dairy subsidies, says the EU’s recent announcement that it will increase tariffs on Chinese electric vehicles has led to a counter-reaction.

“With the EU tariffs set to rise significantly, China’s Ministry of Commerce has launched an investigation into EU dairy subsidies that could have far-reaching consequences for European exports. 

“The targeted products, including liquid cream and various cheeses, represent a significant trade value of US$572.5 million [$917m] as of 2023,” report co-author senior agricultural analyst Emma Higgins said.

While the report says the current investigation does not encompass the highest-volume categories such as whey-derived products and milk powders, there is concern within the industry that China may broaden its investigation.

“The investigation, expected to run through most of 2025, leaves the door open for potential market impacts by 2026. France, as a major exporter, could be significantly affected, given its 37% share in the targeted product exports,” Higgins said.

“Meanwhile, some dairy industry participants are concerned that China could expand the scope of investigation-targeted products.”

As the investigation unfolds, non-EU dairy exporters including Australia, New Zealand, the UK, and the US are poised to capitalise on any resulting trade shifts.

Should there be any additional tariffs implemented, products sourced from  Oceania could be more competitively priced.

“As it stands, New Zealand and Australia already export large volumes of cheese and cream into China and would therefore be well-placed to step in and fill any trade gaps that might arise,” she said.

China’s domestic dairy industry is currently experiencing overproduction relative to demand. This has prompted a strategic shift towards value-added dairy products to better utilise the surplus and potentially reduce reliance on imports. 

“The ongoing trade tensions with the EU may inadvertently accelerate this transition, offering a silver lining for local Chinese dairy producers and exporters from other nations,” Higgins said.

A golden era of free trade is over as countries take more nationalistic approach while setting up greater regulatory hurdles, according to a London based trade expert.

David Henig, a director for the United Kingdom Trade Policy Project, European Centre for International Political Economy, said since Chinese economic growth has slowed, no country has come forward to replace it.

India had been seen as an obvious candidate, but Henig said access is complex and the regulatory hurdles high.

“Every country is trying to get in there but the trouble is there are multiple reasons why it is a difficult nut to crack.”

As the growth of international trade has slowed, Henig said, the regulatory requirements imposed by countries have expanded and much of that is being driven by the European Union.

“There is a sense the EU is the dominant regulatory player, it sets the pace and everyone falls in behind it because that is the standard that has to be met.”

Henig has been involved in the EU-United States Trans-Atlantic Trade and Investment partnership and helped formulate UK trade policy following the 2016 Brexit referendum.

He said the “low-hanging fruit” of free trade agreements have mostly been plucked, which coincides with countries becoming more nationalistic.

“The countries that are doing them are at an end but populations are more suspicious as they haven’t necessarily lived up to what they [FTAs] promise.”

Future trade agreements are likely to be small trade deals or deals that cover multiple issues other than trade access.

Few of these deals are being negotiated. 

Politically, announcing free trade agreements is much more popular than announcing the lowering of trade-disrupting regulations, which would be of significant benefit to exporting companies.

The increased volume of regulations around food production is despite little apparent thought about wider implications and how they squeeze out smaller exporters and producers.

Henig said large food-producing companies rather than small players have the scale and ability to meet those regulations while also satisfying retailer requirement for year-round supply.

Food-exporting countries like New Zealand, Henig said, need to stay ahead of the regulatory environment.

“It’s not about quality of product but the way its produced, such as the impact of climate change and adhering to the sustainability agenda.”

He said there is plenty of pressure from groups seeking government regulations on food production to address concerns about sustainability, environment and animal health.

“The net result is that regulations are expanding and we end up with a huge burden to meet.”

The widely questioned EU deforestation policy – a blanket requirement for producers of products such as beef to prove production did not result in deforestation – is an example of policy advocated by interest groups but for which there are significant unintended and wide-ranging consequences.

Henig said this regulatory growth is an untold story but could start to level off due to the complexity it has created.

“They may be able to justify it individually, but cumulatively it makes it virtually impossible for the smaller guys.” 

He would not be surprised if food producers were one day be required to provide consumers with guidance on packaging about the degree of sustainability of the production system, such as traffic lights.

Henig also thinks producers will have to provide verification about claims such as “pasture raised”.

The increasing regulatory process means countries are focused on protecting access to markets for their premier products by ensuring they adhere to those regulations, in the UK’s case exports of Scotch whisky, which are worth NZ$15 billion a year.

More: Wallace is visiting seven countries in six weeks to report on market sentiment, a trip made possible with grants from Fonterra, Silver Fern Farms, Alliance, Beef + Lamb NZ, NZ Meat Industry Association and Rabobank.  Read more about his findings here.

Earlier this month Farmers Weekly reported on the China-EU trade tensions and how they could create further opportunities for New Zealand dairy.

Written by Nigel Stirling, the article started by telling us that “an anti-dumping probe by the Chinese government could sideline European dairy producers and create new opportunities for New Zealand in the world’s biggest dairy import market”.

That’s good news for New Zealand as increasingly we’re living in a volatile world with a volatile trading environment.

China is the world’s biggest importer of dairy products and our largest trading partner. We need to keep them on side for the good of the country. Without China our economy would be, charitably speaking, toast.

It was, therefore, with some concern that I viewed recent statements by our prime minister concerning the new direction of our foreign policy.

I’ve been a proud supporter of New Zealand’s independent foreign policy and believe it has served us well.

We’re now told by the prime minister that “New Zealand is undertaking a foreign policy reset”. That was followed by his statement that “the days of New Zealand’s independent foreign policy are over”.

I don’t remember any discussion of that change in foreign policy direction either during the election campaign or since. It is a major issue. It needs to be publicly debated and not dictated from on high.

It seems what that reset means is cuddling up to the United States. The two current international flashpoints, Ukraine and Gaza, have the US’s footprint all over them and NZ shouldn’t be involved.

Sadly we are. We’re training Ukrainian troops in the United Kingdom. That was, in my view, a mistake by the previous government. The Ukrainian crisis will be solved by talking and not by getting involved in the military operation.

Currently Russian President Vladimir Putin is threatening war if the US and UK supply Ukraine with long-range missiles. Do we want to be involved?

Stupidly, in my view, we’re also tied up in the Middle East and, again, on the side of the US and UK. We’re involved in a force that is undertaking airstrikes against Houthi rebels in Yemen. The Houthis claim, right or wrong, that they are targeting ships assisting Israel.

What that means is that in the two major conflicts currently affecting the world we are on the side of the US and I can’t understand why.

The argument revolving around traditional allies doesn’t wash. Yes, we fought with the US in World War II and in Vietnam. We went to Vietnam because we were promised a free trade agreement with the US, which never eventuated. 

With Ukraine it seems to me that all the US and to a lesser extent NATO are doing is upping the stakes, to the tune of US$380 billion ($613bn) since January 22. The US contribution to that was US$58.5bn.

They are huge sums and have they achieved anything? I’d suggest not, except navigating us ever closer to a nuclear conflagration.

Then in the believe-it-or-not category, the US has ordered India and China to stop supplying munitions to Russia. I fail to see the difference with the US supplying arms to Ukraine and China supplying them to Russia.

Indian companies have been hit with the US reprisals and remember it is part of BRICS, the coalition of Brazil, Russia, India, China and South Africa.

If we really do want an FTA with India, backing the US isn’t smart.

Then, idiotically, we’re considering joining AUKUS pillar 2, the nuclear agreement between Australia, the UK and US aimed at China. The Chinese advised against the move.

Again, stupidly in my opinion, we’re joining a US-led space initiative that “aims to deter threats in space from hostile countries”. For hostile countries read China. Defence Minister Judith Collins then told me that we “will retain operational sovereignty”. Spare me.  

Then Prime Minister Christopher Luxon said that “NZ is keen to be part of the broad US-led rules-based international order”.

How? I’ve discussed Ukraine, and the Gaza conflict has been described by the United Nations as “American-sponsored genocide” to the tune of US$158bn.

That promises the same potential of a nuclear war as the Ukraine conflict.

Mr Luxon also told me he was “deliberately deepening our relationship with Five Eyes”. For the reasons I’ve outlined, why would you?

I don’t believe the US is serious about creating a rules-based world order. Look at how it’s broken the rules-based World Trade Organisation.

Another complication with the government’s move is the pending US presidential election. The Trump-Vance team has promised to raise tariffs on all imports. That won’t be good for New Zealand.

In addition, heaven only knows what that team will achieve for world order and world peace.

NZ is a trading nation that has successfully relied on an independent foreign policy. We should continue to do so.

Trade barriers affecting nearly $190 million of exports have been removed by the government over the past year.

Minister for Trade and Agriculture Todd McClay said they had resolved 14 non-tariff barriers (NTBs) over that period, returning significant value to Kiwi exporters. 

“These efforts directly boost our trade value and make it easier for businesses to expand into key international markets.”

The also support the government’s target of doubling exports by value in 10 years, he said.

NTBs, which include regulatory obstacles like complex certification processes and import restrictions, currently affect $9.8 billion worth of New Zealand’s trade, with the primary sector facing the greatest impact.

“Boosting the export value of farming, forestry, horticulture and wine production [is] vital to our economy, as we oppose distortionary agricultural subsidies through the WTO to enhance global food security.” 

The NTBs resolved include: 

• A barrier that had affected $5m in trade devices exports to Mexico.

• Labelling issues in South Korea that cleared a shipment of New Zealand cheese worth $1.8m.

• Reduced regulatory burdens for wine and spirits exporters, including expanded labelling flexibility, with the European Union. 

• Restored onion exports to Indonesia, NZ’s largest onion market, through streamlined phytosanitary certification.

• Restored log exports to India following changes to NZ’s fumigation practices.

“New Zealand exported $96.3 billion worth of goods and services in 2023. Over the next 12 months we will continue our focus on reducing NTBs including around costly EU deforestation regulations, Canadian dairy import restrictions, $300m of cosmetics exports to China and restrictions on structural timber exports to Australia,” he said.

In Focus Podcast | A new strategy for advocacy

AGMARDT and KPMG have released a report that offers a new way of organising our advocacy networks. Common Ground assesses the positives and negatives of the advocacy groups we have now and sets out a strategy that could improve the collaboration and messaging emanating from the farming world. AGMARDT general manager Lee-Ann Marsh joins Bryan to discuss the report.

A petition has been launched to stop imports entering New Zealand from countries that allow farming practices that would be illegal in this country.

The petition, by animal law expert and University of Auckland Associate Professor Marcelo Rodriguez Ferrere and supported by Animal Policy International, was launched at an event at Parliament.

It urges the government to enact legislation ensuring all imports meet New Zealand’s domestic animal welfare standards.

“In my view, allowing imported animal products with lower standards than NZ undermines the spirit and effectiveness of our laws and our commitment to animal welfare, and creates an unfair double standard that privileges overseas producers over domestic farmers,” Ferrere said.

Animal Policy International investigated egg farms in India earlier this year, filming hens confined in battery cages, raising concerns about these eggs or egg products imported into the New Zealand market at a time when NZ and India discuss the potential for a bilateral trade agreement.

The footage showed overcrowded conditions with up to 10 hens crammed into cages typically used for 2-3 birds, hens with injuries, swollen glands and beaks, dead birds left lying around the cages and insufficient and poorly maintained water access points.

Battery cages have been banned in NZ since 2023 due to animal welfare concerns.

Animal Policy International co-executive director Rainer Kravets said after he witnessed the conditions in India for himself, he was sure New Zealanders would be horrified at what those hens endured.

“New Zealanders have made it clear that they don’t support cruel farming practices like battery cages. Allowing cruel imports produced under conditions we’ve banned here undermines our values and undercuts our farmers. It’s time to close this loophole and ensure all products in our market meet our ethical standards.” 

New Zealand imports a large number of products produced under conditions that are illegal domestically, such as the use of battery cages for egg-laying hens, sow stalls for pregnant pigs, and the mulesing of sheep.

This was highlighted in a report released in March, Closing the Welfare Gap: Why New Zealand must apply its animal protection standards to imports.

NZ Pork chief executive Brent Kleiss backed the report’s findings, saying they align with what the organisation has been advocating for some time.

“We import pork from 22 countries and those countries – they are providing pork that’s been raised to lower standards of care than what we expect of our own producers,” he said at the time.

After being disappointed by New Zealand’s trade agreement with South Korea nearly a decade ago, the dairy and deer velvet industries are hoping for better treatment second time around.

Prime Minister Christopher Luxon and his South Korean opposite number Yoon Suk Yeol recently announced the two countries would explore upgrading the 2015 agreement although did not set out a timeframe for doing so.

“I look forward to continued growth in our trade relationship and was pleased to announce that we will explore the possibility of an upgrade to our bilateral free trade agreement,” Luxon said.

Five years of often testy negotiations concluded with an agreement in November 2014, entering into force a year later after being ratified by Korean lawmakers in December 2015.

Kiwifruit had been the major winner with tariffs of 40% eliminated in six years, compared to the nine years major rival Chile had achieved in its 2003 deal with the Koreans.

Beef exporters were also reasonably content, achieving the same 15-year phasing-out of tariffs as Korea’s deals with competitors in the European Union, Canada, Australia and the United States.

The same could not be said for the dairy industry.

While hefty tariffs on butter, cheese and infant formula were to be phased out over a respectable 15 years, the Koreans were harder to budge on NZ’s key milk powder exports.

The Koreans conceded an initial tariff-free quota of a mere 1500 tonnes per year, equivalent then to three days’ production at Fonterra’s Edendale factory. This was to rise by a paltry 3% each year to a maximum of 1957t after 10 years.  For all other milk powder exports the existing tariff of 176% was to remain.

But in 2015 hopes were high South Korea’s imminent application to join the TransPacific Partnership (TPP) would allow NZ to use its leverage as a foundation member of the 11-country trade agreement to gain more than the Koreans had been willing to give up in bilateral negotiations.

Fonterra’s director of global stakeholders affairs Simon Tucker said the withdrawal of the United States from the TPP by Donald Trump on his first day as United States president in 2017 dashed those hopes.

“When the US pulled out there was a bunch of those that had been around the table and those who were candidate countries who reassessed [joining].”

Tucker said the dairy industry welcomed the agreement being re-examined.

He said NZ exporters had been disadvantaged by not having the same market access as European and US rivals had achieved through their countries’ own trade deals.

“The Europeans are the biggest dairy exporters and the US and NZ are second and third.

“We all have market access deals into Korea so it is a pretty competitive market and obviously we would like to have the best possible access and where it is not as good as what our US and European competitors [have] we would like at least equivalent so we could compete on a level playing field.”

Deer Industry NZ chief executive Rhys Griffiths said when negotiations concluded the deer velvet industry had been disappointed at the outcome for tariffs for its single largest market.

While tariffs had been reduced on dried velvet, the 20% tariff on unprocessed velvet was left untouched.

At the time unprocessed velvet made up 75% of NZ’s velvet exports to Korea.

However Griffiths said the gradual reduction in tariffs on dried velvet coincided with a sharp increase in demand from Korean contemporary health food companies for the product.

Velvet exports to Korea had since increased from $20 million to $40m, with much of that growth in exports of the dried variety.

“It came just as we were beginning to engage with these healthy food companies that preferred the velvet dried in NZ just because of our regulatory system.

“Of course we said we were disappointed that we did not get unfettered market access but in reality having that outcome put us in a very good position to add more value here.”

Griffiths said the agreement as it stood took 15 years for tariffs to be fully phased out for dried velvet.

“It would be really helpful if we got that rate of [tariff] decrease increased or got free access as soon as possible and for consumers over there too.”

In Focus Podcast | Meeting the market in the US and EU

Roving reporter Neal Wallace calls in from Brussels to share insights on the first week of his Meeting the Market tour. He’s been in the United States where some of our biggest customers are, including Mars and McDonald’s. Neal says they love NZ food but there are a couple of things we need to improve if we’re to remain as a supplier of first-choice.

An anti-dumping probe by the Chinese government could sideline European dairy producers and create new opportunities for New Zealand in the world’s biggest dairy import market.

China’s Commerce Ministry last month said it would investigate claims that the dumping of subsidised imports from the European Union on the Chinese domestic market was damaging its dairy industry.

The announcement came a day after the EU confirmed it would use tariffs to stem a surge in imports of Chinese-made electrical vehicles.

Rabobank dairy analyst Emma Higgins said the products under investigation, which include fresh liquid cream and grated and blue vein cheese, are not a large part of the EU’s dairy exports to China, in comparison to other dairy categories like whey.

If China responds against them with tariffs it could create opportunities for Chinese dairy manufacturing companies and others from outside the EU to fill the gap. 

Higgins said China’s dairy industry is known to want to increase its small cheese manufacturing capacity to boost returns from milk surpluses currently in the market.

“The trade tensions with EU potentially mean trade flows could easily benefit us here in NZ as well as potentially the domestic dairy players in China with offshore assets in this part of the world as they look to maximise any opportunities that present themselves.”

While the European products being investigated do not include the milk powders, butter and cheeses that dominated NZ’s trade with China, that could change as tensions rise. 

Higgins said that China has shown with its now-settled diplomatic and trade dispute with Australia that it is not afraid to ratchet things up.

China hit back at calls by then-Australian prime minister Scott Morrison’s call for an inquiry into the origins of coronavirus with tariffs on Australian barley in May 2020 before quickly moving to blacklist multiple beef plants, and later in the year used tariffs against its wine exports.

“Right now the disruption to global dairy markets is likely to be minimal based on the small volume of product and the types of products that are under investigation,” Higgins said.

“But these kinds of disputes can last several years and can extend out and either the [basket of] products being investigated expands out or the time period of uncertainty extends out.”

An executive at one large dairy exporter said his company is watching the situation closely “because it involves the world’s biggest dairy import market and the world’s largest dairy exporter”.

Another industry figure believes China could argue that the recent period of low returns for its producers has been made worse by European subsidies contributing to higher global production than could be justified by market prices. And targeting a small selection of products could be the easiest case to prove.

A study commissioned by the Dairy Companies Association of NZ backed this up when it found earlier this year that a 50% reduction in EU subsidies would lead to a 2.4% increase in factory-gate cheese prices for non-EU producers.

At the same time the timing of China’s dairy probe so soon after the EU’s tariffs on Chinese-made EVs suggested retaliation and further tit for tat escalation to include larger volume products couldn’t be discounted.

“China has basically said if you are going to look at our industrial policy then we are going to look at your agricultural subsidies,” one source said.

The EU is a significant competitor in most of NZ’s major dairy exports to China.

While last year it accounted for only 2% of China’s imports of whole milk powder compared to NZ’s 88%, the EU had a 22% share of skim milk imports while NZ accounted for 45%. For cheese the EU’s market share was 18% versus NZ’s 59%. For butter the EU accounted for 11% of Chinese imports and NZ’s share was 87%.

However, a dairy company executive who spoke to Farmers Weekly on condition of anonymity said NZ farmers shouldn’t rush to cheer on China in a trade war with the EU which escalates to include tariffs on major dairy commodities.

“If the European dairy industry cannot send cheese to China then it will send it somewhere else and probably with even more European Commission subsidies to help them sell it.

“There might be some short-term opportunities but that is the reality.”

In Focus Podcast | Meeting the market in the US and EU

Roving reporter Neal Wallace calls in from Brussels to update Bryan on the first week of his Meeting the Market tour. He’s been in the United States where some of our biggest customers are, including Mars and McDonald’s. Neal says they love NZ food but there are a couple of things we need to improve if we’re to remain as a supplier of first-choice.

Alliance Group has signed agreements in South Korea and Malaysia to lay the foundation for it to expand its premium red meat portfolio in both countries.

The Memorandums of Understanding (MoU) are with South Korean distributor Daesang Corporation and Fatric in Malaysia. 

Daesang, one of the leading producers of traditional Korean foods and a food innovation leader, will spearhead the promotion of Alliance’s award-winning Lumina Lamb and educate its customers and consumers about New Zealand lamb. 

Alliance’s MoU with partner Fatric will see the expansion of the company’s premium lamb and mutton programme in Malaysia. Alliance’s Pukeuri (Oamaru) processing plant is one of just five New Zealand lamb plants licensed to supply Malaysia. 

The two agreements were signed as part of Prime Minister Christopher Luxon’s official trade delegation to South Korea and Malaysia, which aims to boost trade ties with the countries and highlight New Zealand’s strength in producing high-quality, safe and nutritious food and beverages. 

During the visit, Alliance’s premium lamb was showcased to South Korean influencers and media. The tasting event at Korea House in Seoul aimed to educate guests about New Zealand food and how to enhance the eating experience through wine pairings. 

A full gala dinner followed the tasting event. 

Willie Wiese, chief executive of Alliance Group, said there are exciting opportunities for beef and lamb in South Korea. 

“Under the free trade agreement between the two countries, New Zealand sheepmeat exports to South Korea are tariff-free this year and beef will be tariff-free from 2029. 

“We have ambitions to build awareness of Lumina Lamb and our other premium programmes in South Korea so we can capture greater value for our farmer-shareholders.” 

Alliance is also exploring ways to strengthen its premium lamb and mutton programmes in Malaysia in conjunction with partner Fatric, Wiese said. 

“Alliance and Fatric have been working together for more than 30 years and we see great opportunities to enhance this collaboration and pursue further growth together.

“Malaysia is a key growth market for lamb and mutton as a fast-growing emerging economy with rapid urbanisation, increased economic growth and discerning consumers. We see significant potential to drive greater sheep meat consumption.  

“Alliance and Fatric will collaborate to drive innovation, with a specific focus on expanding premium products of New Zealand origin that are tailored to the Malaysian market.  

“This includes value-added food solutions, retail-ready products, and ready-to-eat propositions. Our goal is to develop innovative food solutions that cater to emerging channels and the diverse needs of the growing Malaysian consumer base.” 

Fatric has four distribution facilities covering key states across West Malaysia and also operates further processing capabilities in the country’s capital, Kuala Lumpur.  

It has a well-established route to market across Malaysia, covering all channels including wholesale, modern and traditional retail and e-commerce channels. 

The GDT index eased 0.4% in the latest auction to settle for an average price of US$3833 a tonne and 88% of product on offer sold.

Results were varied across the product mix, with whole milk powder (WMP), butter and lactose pulling the index down, while all others increased.

NZX dairy analyst Rosalind Crickett said the results were a little off their expectations, led by a soft drop in WMP and butter. 

WMP eased -2.5% to settle at an average of US$3396/t, not retracing too much of the gains made at the previous auction. 

Skim milk powder (SMP) climbed 4.5% to settle at US$2753/t – its fourth highest average price achieved in the past 12 months. 

There was little price movement in the milk fats compared to the last auction. There was a slight divergence in pricing this time, with AMF rising a marginal 0.7% to round the auction out at an average of US$7311/t – its fourth consecutive increase. 

Butter softened down 0.9% to US$6675/t. Cheddar also saw a modest uptick of 0.9%, closing out the auction at US$4324/t. 

The largest price movement activity at this auction was in lactose, mozzarella and buttermilk powder (BMP), with lactose falling 8.9%. 

Mozzarella skyrocketed 7% to settle at US$5145/t and BMP prices leapt 8.4% to US$3024/t. 

Regional buying was again led by North Asia, which took out the lion’s share of both milk powders, milk fats and cheddar – accounting for 47% of all product volume. 

Southeast Asia/Oceania was the next top purchaser volumes-wise, absorbing 30% of all product.

When newly re-elected European Commission President Ursula von der Leyen acknowledged agriculture as a strategic asset, it piqued the interest of the community’s seven million farmers.

Patrick Pagani, deputy secretary-general of farm lobby group Copa Cogeca, said the recognition was in contrast to how European farmers felt they were previously treated.

“There has been a lack of farmer engagement but also a lack of recognition of the important role of farming in Europe,” he told Farmers Weekly at his Brussels office.

Earlier this year farmers took to the streets in 20 of the European Union’s 27 member states, protesting local and international issues such as a flood of Ukrainian food exports, a lack of response to drought and farmer returns being squeezed by processors and retailers.

Pagani said this reflected a top-down approach from Brussels bureaucrats who imposed targets on the sector and treated them as a problem.

He was therefore heartened at the noticeable change when in July Von der Leyen referred to agriculture as a strategic asset in her speech setting the scene for the next four years.

It is a comment not made in recent years.

“It means they consider farming and food as a priority and action will follow,” said Pagani.

He hopes it will encourage engagement with the sector and an end to impractical policies.

“We are happy to see this top-down approach abandoned and move to transitioning with the sector.”

Copa Cogeca represents 64 farming and co-operative members from the EU’s member states and is the largest such body in Europe.

It has 50 staff in its Brussels office.

Pagani said the challenges facing the sector are real.

The average income earned by 60% of Europe’s farmers is lower than other sectors and 30% of farmers will retire in the next decade.

Since 2005, 3 million farms have disappeared under urban sprawl or amalgamation.

The EU has a target of a 55% reduction in carbon emissions, compared to 1990 levels, by 2030, a 90% reduction by 2040 and carbon neutrality by 2050.

In 2020 EU agrifood systems contributed 31% of Europe’s greenhouse gas emissions.

During her campaign, Von der Leyen spoke of ensuring farmers can work their land without excessive bureaucracy while rewarding those who work with nature and preserve biodiversity and natural ecosystems while helping to decarbonise the economy.

She has commissioned a Strategic Dialogue on Agriculture, a vision for farming and food production that will be released shortly.

“This is important because it is a process that has never happened,” said Pagani.

While the commission’s approach to agriculture appears to have changed, he said that intent needs to be turned into action.

“We are only asking to have put back the competitiveness and economics of the sector, a transition that includes the three pillars: economic, social and environmental.”

The EU Green Deal, a policy adopted in 2022, aims to transform the bloc into a modern, resource-efficient and competitive economy.

For agriculture, it aims to enhance food security, reduce the environmental and climate footprint of food and make food systems more resilient and sustainable through an aligned Farm to Fork strategy.

A report from Wageningen University warns livestock numbers could fall 10-15% in order to meet nutrient loss targets, while feed costs are likely to rise.

The policy will also lower the use of pesticides and antimicrobials, impacting crop yields.

Soil is one of the policy’s target area with an estimated 60% classified as unhealthy and 83% containing pest residues.

By 2050 data will be collected on the health of soils and made available to farmers and other soil managers to improve its management.

The Farm to Fork strategy seeks to balance environmental impacts, mitigate and adapt to climate change, and reverse the loss of biodiversity while ensuring food security and access to nutritious and safe food.

Pagani said the current NZ$690 billion Common Agricultural Policy expires in 2027 and his organisation will seek to negotiate a new policy that includes financial support, trade, plant protection, bioactive controls and fair trade protection for farmers selling products.

Other challenges being pursued by Copa Cogeca include flexibility in meeting the 2050 net carbon zero target, imported products having equal production standards to those produced locally, and shortening the six to seven years it takes to release a product developed with new genomic techniques.

More: Wallace is visiting seven countries in six weeks to report on market sentiment, a trip made possible with grants from Fonterra, Silver Fern Farms, Alliance, Beef + Lamb NZ, NZ Meat Industry Association and Rabobank.  Read more about his findings here.