November 10, 2020
The Economic Research Service recently explored the "Economic and Food Security Impacts of Agricultural Input Reduction under the European Union Green Deal's Farm to Fork and Biodiversity Strategies."
What is the issue?
The European Commission unveiled its Farm to Fork and Biodiversity Strategies that would impose restrictions on European Union agriculture through targeted reduction in land use, fertilizers, antimicrobials and pesticides. These strategies represent a fundamental shift in EU food and agricultural policy, with fundamental implications for the structure and productivity of the EU food and agricultural industry.
What did the study find?
Three adoption scenarios were analyzed. The authors found:
The decline in agricultural production in the EU would range from 7% (global adoption) to 12% (EU-only). Impacts on production would be smaller worldwide, except in the case of global adoption, when production would decline by 11%.
The decline in agricultural production would tighten the EU food supply, resulting in price increases that impact consumer budgets. Prices and per capita food costs would increase the most for the EU, across each of the three scenarios. However, price and food cost increases would be significant for most regions if strategies are adopted globally. For the United States, price and food costs would remain relatively unchanged except in the case of global adoption.
Production declines in the EU and elsewhere would lead to reduced trade, although some regions would benefit depending on changes in import demand. However, if trade is restricted as a result of the imposition of the proposed measures, the negative impacts are concentrated in regions with the world’s most food-insecure populations.
The declines in production and trade, coupled with the projected increases in food commodity prices, would significantly reduce the EU’s gross domestic product (GDP), especially if adoption was limited to the EU. In that case, the EU’s decline in GDP would represent 765 of the decline in the worldwide GDP. If the Strategies were adopted beyond the EU, however, the EU’s share in decline of worldwide GDP would drop to 49% in the middle scenario and as low as 12% if globally adopted. The effects on the GDP of the United States would be smaller than for the EU and worldwide under all adoption scenarios.
Food insecurity, measured as the number of people who lack access to a diet of at least 2,100 calories a day, increases significantly in the 76 low- and middle-income countries covered in our analysis due to increases in food commodity prices and declines in income, particularly in Africa. By 2030, the number of food-insecure people in the case of EU-only adoption would increase by an additional 22 million more than projected without the EC’s proposed Strategies. The number would climb to 103 million under the middle scenario and 185 million under global adoption.
Who are the study's authors?
The authors are Jayson Beckman, Maros Ivanic, Jeremy L. Jelliffe, Felix G. Baquedano and Sara G. Scott.
Learn more about the study here.
Source: USDA ERS, which is solely responsible for the information provided and is wholly owned by the source. Informa Business Media and all its subsidiaries are not responsible for any of the content contained in this information asset.
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