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News

EU agri-food sounds 'alarm bells' over energy crisis

23/09/2022 - Press release , François-Xavier Branthôme - 2022 Season

Operators across the EU agri-food chain are struggling to keep businesses going in the face of rapidly rising input costs and extreme weather, according to industry associations representing the sector.

In a joint statement released on September 8, 2022, Copa-Cogeca, the Primary Food Processors (PFP) and FoodDrinkEurope warned that production costs have increased 'dramatically' as natural gas, electricity, fertilizers, fuel, packaging and labor expenses have ail risen.
Cost increases were initially due to a post-COVID rebound in demand and supply chain constraints, but they have been severely exacerbated by the Russian invasion of Ukraine, they warned.

Combined with extreme weather events, the current situation is a perfect storm for European food producers. Droughts, storms and frosts have already caused 'major impacts' on the farming community and agri-food businesses, they said.
"More and more companies in the EU agri-food chain are struggling to maintain their operations, with some composes faced with the choice of stopping production, laying off staff or going out of business," the joint statement warned.

A call to action
Timed ahead of the Extraordinary Energy Council on Friday 9 September and European Commission President Ursula von der Leyen's annual State of the Union speech next week, the industry lobbies want the EC to take action.
The agri-food chain backed the European Commission's recent "Save Gas for a Safe Winter" Communication, which they said singles out the critical importance of Europe's agri-food supply chain and the need for a secure supply of gas to maintain food security.
However, to continue operating and to maintain a fully functioning food supply chain, the sector needs 'certainty on the access to energy and stable prices'.
Specifically, the food bodies continued, the Commission must support Member States to intervene to bring energy prices down and increase liquidity on energy markets, diversify energy supply, boost sustainable energy generation, and support the competitiveness of operators,
More EU oversight of Member State gas rationing plans is also needed, to make sure they prioritize the agri-food sector, it was insisted. In addition, a further revision of the Temporary Crisis Framework is urgent to ensure that it can be used by Member States and businesses.
"We hope Energy Ministers reflect on the impact on the agri-food sector at their meeting, and that president Von der Leyen will acknowledge the vital importance of the agri-food sector at her State of the Union address.
"As during the COVfD-19 crisis, we are committed to working with the European Institutions to provide a continuous supply of high-quality and affordable products."

Temporary suspension of tariffs on fertilizers
Earlier this year, Copa Cogeca welcomed the EU decision on temporary suspension of tariffs on fertilizers, noting that “the Commission decision goes in the right direction, but remains incomplete for the time being”.

In its statement at the end of July 2022, Copa Cogeca explains that “faced with a tense situation on the fertilizer markets, the European Commission (DG Trade) has taken a long-awaited decision by the farming community: the suspension of conventional tariffs for certain fertilizers (urea and anhydrous ammonia). Copa and Cogeca welcome a step in the right direction and call on the Commission to follow its logic to the end by also suspending conventional duties on key fertilizers used directly by farmers (UAN, DAP, MAP and NPK) and antidumping measures on UAN imports from Trinidad and Tobago and USA. Only such an ambitious measure could make those markets more dynamic and bring down the prices paid by farmers in the long term”.

Some complementary data
Complete Copa Cogeca statement on energy crisis is available here; comment of tariffs’ suspension on fertilizers is available here.

Copa Cogeca press releases published over past three years are available at:
https://copa-cogeca.eu/press-releases

Sources: copa-cogeca.eu, foodnavigator.com

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