The EU is preparing to change its agricultural storage policy at a time when the COVID-19 health crisis has highlighted the weaknesses of its reserves. EURACTIV France reports.
The health crisis has highlighted certain vulnerabilities of the EU food sector and, with the food supply under pressure, the issue of food sovereignty is once again coming to the forefront.
However, there are now concerns related to EU food stocks.
For example, the EU has an extremely low level of cereal stocks, amounting to 12% of annual consumption, which corresponds to about a month and a half’s worth.
By comparison, all the other major countries are more cautious: Russia (18%), India (23%), the US (25%), while China, the largest country in terms of population, still holds the largest stocks, i.e. 75% of its consumption.
43 days of cereal consumption v. 90 days of oil consumption
“The EU considers that supplies can be made on the market. But we have seen countries such as Kazakhstan, Georgia and even Romania close their export markets: in the event of a crisis, there is no market that will hold out,” said Frédéric Courleux, head of research at the Agriculture Stratégies think-tank.
The specialist is surprised to see the EU organising its oil and gas stocks for 90 days’ consumption in each country, without considering the issue of food stocks, which is more crucial for the well-being and survival of its population.
Rising food protectionism
In response, there now seems to be a growing trend of food protectionism, something that the EU has been keen to avoid due to the risk of affecting the single market.
Europeans themselves have stocked their cupboards with subsistence foodstuffs, to the extent that flour has regularly found itself out of stock in France, despite it being Europe’s leading wheat producer.
Despite the fact that France produces adequate quantities of flour, there is a lack of large milling capacities, meaning that France produces very little flour.
Now some vulnerable countries are seeking to build up grain reserves to ensure the continuity of national food supplies.
“A third of the wheat supply on the market is subject to cautious restrictive measures by its major exporters, led by Russia. At this stage, the export bans have mainly led to a shift in demand towards European countries, such as France, rather than a shortage of supply,” notes export insurance agency Coface in its analysis on international trade.
The agency also points out that rice stocks have reached a seven-year high, as these are high both in China as well as India and Thailand, the two main exporting countries.
Here again, the issue is less a question of stocks than of logistics.
Lockdowns have led to the interruption of certain logistics chains, reminding us that food demand is constant and that stocks are of no interest if they are not available locally, for both food and energy.
The great return of stocks?
In its Farm to Fork (F2F) strategy, the European Commission has taken account of the recent crisis.
The EU executive states that there will be a rethink of the “agricultural crisis reserve” so that “its potential can be used upstream.”
The Commission is also proposing a new mechanism, known as the “food crisis response”, which it would coordinate itself and involve the EU member states.
In 2021, the EU executive is also expected to develop a contingency plan for ensuring food supply and food security during crises of any nature.
However, the amounts that could be devoted to these new tools are not yet defined.
In any case, it seems that public intervention can only return to the forefront, as the Agriculture and Strategy think-tank argues in its proposal on the European Green deal and the CAP.
