The European Union’s attempts to improve environmental sustainability could be at the expense of food production, opening opportunities for food exporters such as New Zealand.
Justin Sherrard, Rabobank’s animal protein global strategist, told Farmers Weekly that the EU’s motivation is clear: its politicians are increasingly worried more about the environment more than they are about food production.
“If the EU keeps going down this road, that is good news for NZ farmers because the EU will have to import more food,” said Sherrard, who is based in Rabobank’s Amsterdam office.
He said there has to be a balance between food production and the impact on the environment, but the needle appears to be shifting.
That environmental focus will reduce the number of farms and reduce domestic agricultural production, with forecasts dairy cow numbers alone could fall up to 15%.
Such a decline will also impact beef supplies, as much of Europe’s domestic beef production is crossbred from dairy cows.
It is likely to be a long game for NZ exporters, with a gradual increase in demand rather than a sudden ramping up.
He questioned whether the NZ-EU free trade agreement has the flexibility and market access that could be needed.
Sherrard said in pursuing its environmental policies, the EU has not built bridges between the factions that have developed, creating a discussion vacuum on the implications of the policies.
“The sensible centre, that is the piece that is missing,” he said.
For example, the EU’s deforestation policy is heavily promoted by non-government organisations and implemented by the director-general for the environment, but lacks input from the EU’s directors-general of agriculture and trade.
The policy is aimed at stopping deforestation of the Amazon and requires producers of certain products to prove their production did not cause deforestation.
An unintended consequence is that it will impact all producers of these products, including beef and its derivatives.
Sherrard said it shows how far policy development has fallen out of balance and how little consideration is given to consumers.
“Governance is about finding the balance.
“I am asking the question if we have the balance right or is it a temporary thing?”
Similarly is the solution to the Netherlands’ livestock manure nutrient issue.
He said the country in the 50 years since World War II became a self-sufficient, highly productive food producer using new, leading technology.
Faced with the nutrient issue, the government’s solution is to cut livestock numbers.
“They’re ignoring history.”
Denmark also risks ignoring its history of innovation by implementing a tax on agricultural greenhouse gas emissions.
“That’s what is missing here, a discussion about using innovation to maintain high levels of production but low carbon emissions.”
That aside, he said the Denmark proposal does include both sticks and carrots for farmers to lower their emissions and Sherrard hopes there will be a significant focus finding innovative and technological solutions.
“I think Denmark may have the balance between sticks and carrots .
“I don’t think you had that balance right in NZ in the first instance.”
He believes the establishment in NZ of the investment group AgriZero will pay huge dividends for NZ, recognising the future role of technology in solving sustainability issues.
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.
