The impact of the coronavirus pandemic is strongly felt in the European agriculture, and this is the year when EU countries are trying to agree on the new seven-year budget for the bloc and the allocation of funds for common EU policies. One of those key policies is precisely agriculture. As part of N1’s ongoing series “World in Times of Corona”, foreign affairs editor Ivana Dragicevic spoke to secretary-general of the COPA-COGECA association, Pekka Pesonen.

COPA (Committee of Professional Agricultural Organisations) is a European association of agricultural workers which represents 60 organisations from EU countries, along with additional 36 from Iceland, Norway, Switzerland, and Turkey.

COGECA (General Confederation of Agricultural Cooperatives in the European Union) is the European association of agricultural cooperatives.

COPA-COGECA aims to promote the interests of European agricultural sector as a whole before the European Commission and other EU institutions, as well as participate in creating the EU’s common agricultural policy.

Can you give us a brief overview of which sectors in agriculture have been hit the hardest and what measures have been taken in Europe to help?

First of all, I have to say I’m very proud to see we have been able to supply the European citizens with a stable volume of foodstuffs over the last few weeks with our partners in the value chain. We are very committed to this and we hope that we will be able to keep that in the future, too.

But, while I say this, we have to accept the fact that there have been some difficulties, mainly linked to the non-functioning of the single market, or the risks that we have seen for the single market. They don’t necessarily come from agriculture-specific actions from member states, because some of them wanted to protect their citizens and they closed their borders, and mobility restrictions actually affected trade routes.

When we saw this we pushed the European Commission to take action to reduce this bottleneck and, to a certain extent, most of the restrictions were lifted. We’re happy to see this, because food security, parallel to the functioning of single market, is actually very much linked with our common action in the EU.

For the economic reality, it makes sense that we share responsibility and we produce stuffs in a way that we actually benefit from different sectors and their competitiveness.

When we closed the borders, that has consequently endangered the food security. These two elements are crucially important – the importance of the single market, and the importance of the food security in our modern society.

We see some measures were implemented by the European Commission, and national states as well. But where do you see the biggest threats, in which sectors of the agriculture?

I would say the biggest phenomenon we have seen threatening the sector has been the closure of hotels, restaurants, and catering. That has led to several consequences across the sectors. First, we have seen detrimental developments when it comes to fruit and vegetables, we saw dairy industry go down, and we also saw, surprisingly, some non-food sectors, such as flowers and ornamentals industries, suffering tremendously, because they lost their market overnight.

These sectors were the first ones to come forward, but then when some time has passed, we have seen the consequences across all main agriculture sectors. We have seen much reduced consumption of beef and lamb; we have also seen changes when it comes to wine consumption.

While restaurants and the high-end consumer markets, and catering, consume high-quality wines and champagne, this is no longer present. People now tend to drink cheaper wine, table wine, at home. So, even though we could say that the consumption in volume has been maintained, the structure of consumption has gone to cheaper wines, which means that the farming community is struggling economically.

Do you think that these extraordinary measures we’re living with will have a mid- or even long-term impact on the structure of our agriculture?

We hope we will bounce back for the economic reasons, not necessarily for agricultural reasons. So, if we have a long downward trend, a recession, for x years, we will all suffer, across all sectors, most probably sectors that are closely linked to sustainability. This may mean that we have to convert to practices that were not in line with what was expected before the crisis.

Typically –this has nothing to do with agriculture directly – but you remember that the EU and member states hoped we could move away from single-use plastic. Now, because of the coronavirus, this has been more or less reversed, because of the hygiene reasons. These kinds of issues, we certainly didn’t expect to see happening in the way they did.

This is it, we need to also reflect on what sort of consequences we’ll have across the value chain and for instance agriculture. We have just talks with our members on how do we relate, and how do we see that dependency on imports on some critical components of our food production, for example when it comes to pharmaceuticals or some food additives, that actually improve quality of life for farm animals.

If they are only produced in China, can we be dependent completely on something that is produced outside the EU borders? And then, if something happens, with international logistics for example, we would be in trouble.

We certainly don’t want the consequences for animal health and welfare from this kind of developments. The same goes for human health. We are very dependent on antibiotics which are produced in China. We saw the US government restricting the export of products that are crucially important for human health.

If this is the case, how can we rely on our international trading partners in the future? That is something we need to think about. It’s not that we want that, we don’t want to disrupt international trade, but if we cannot rely on our trading partners, what can we do?

We need to assess the situation and that’s why we’ve asked the European Commission to look at the consequences, the lessons we can learn from the coronavirus crisis, to agriculture policy areas. I think that’s crucially important for us as Europe and our agriculture.

Talking about the lessons we can learn from this, in Croatia, voices from the agriculture sector are saying that this crisis has laid bare some failings that exist, that we import a lot and have forgotten about agriculture and its potential. This was echoed in the government’s plan to rely on small producers, local farming, etc. How do you see that play out?

This is a societal decision. It sounds very easy to say – we have to decentralise our production and go back to basics. Even EU Agriculture Commissioner has proposed some elements to be considered, and going back to smaller unit, if I understood correctly

But the crucial element is how are we going to make this happen economically? Because the reality is that the consumers, you or me, millions of people, are not willing to pay the true price for their foodstuffs.

Are we going to sustain this through a massive increase in subventions? I don’t think so.

European citizens, European member states are not willing to put more money towards common European agricultural policy. So if we go for decreased expenditure for common agricultural policy, how are we going to make the market work in a way that would appreciate, that the consumers would appreciate the product that comes from some farm or region or sector that is considered more sustainable?

That’s a big question. We’re quite worried about the one-sided approach. There are some suggestions in the sector that we go for quadrupling. If we go for 30 percent of organic market share that was promoted by some stakeholders, that means that, at the 30 percent level, instead of seven which is what we have now, organic will be completely different.

And that means there are issues of competitiveness, prices, as well as retailers, who go for private label organic produce range. I wonder if it’s just curiosity or if it has something to do with price. If we go for 30 percent, we need to be much more competitive when it comes to market forces such as price.

I’m not sure that our politicians in the EU or nationally fully realise what that would mean for organic producers, because organic producers we have now made investments for better returns… at least for the moment we can say it tends to be that organic producers have slightly higher margins of return on their investments.

We are very happy to see this. But that margin is crucially important, especially if we’re talking about increasing the market share and becoming more sustainable, if we consider the organic sector to be a part of that. This logic is not clear yet.

Before the pandemic, there was struggle still in Europe about the multiannual financial framework. We now see these emergency programmes being implemented, but in terms of finalising our budget, in what way do you think this will change things?

If you look at the MFF and the expenditure, the big question mark that the Commission and the member states were facing is what the percentage dedicated to common EU policies, not just agriculture, but all of them. Because, now that we have a downward trend in economy, we will lose an important factor, and that is that the internal EU economies have been growing.

And that growth has given more space to common places to be developed. And if we go down with economic development in the EU, we actually have a decline in the overall expenditure of the EU. And this logic will have a fundamental impact on the functioning of the Union.

On the other hand, we see opportunities. I think French President Macron pointed out, this is a moment of truth for the Union, and it’s the member states that can actively help. But then the question is – what are the elements that we need to develop together?

I don’t think it’s realistic that we will go into sectors such as healthcare, because the size of it is ten times the size of agriculture. Or education, per se, it’s not very realistic. But we need to think of something jointly that would increase our resilience.

I think, from our perspective, that the key question will be the development of the single market. Can we ensure that in future we’ll be able to rely on the EU working as one, supplying not only the foodstuff, but all supplies, people, services, goods, and capital across the borders? And, from the farmers’ perspective, from the agricultural perspective, can we ensure that, in a crisis situation, we can actually work normally.

That’s a huge task. We’re talking about millions of people working in the value chain, millions and millions of products grown, transported, processed, sold. This is crucial products – it’s food we’re talking about. Everybody reacts to that.

You saw what happened in the first weeks. Most of the people went to the supermarket and bought up flour, milk, non-perishable goods, canned food, and toilet paper.

In Europe!? We are probably the region with the highest-living standard in the world, and Europeans went to the supermarket and hoarded toilet paper.

I have to say that was really eye-opening for us, to see that the same logic, the same priorities we say existed 100 years ago, they are still there. It’s in our psyche. We go to the supermarket and make sure we have minimum access to food, no matter what. And we have plenty of it. I eat too much. We all eat too much.

You mentioned the psyche and emotions, which are really important in this kind of crisis. In terms of habits, lifestyle, do you think they will change? This hoarding, ancient mentality, was threatening this chain.

I’m a believer in diversification. As long as we have agriculture and economy like that, we are much more resilient to any shock that we may experience. This is also true when it comes to supplying food.

When I hear claims that the best way to have a solution for all of this is to eliminate some sector, because some say, why not eliminate some livestock sectors altogether, or, why don’t we eliminate industrial farming, whatever that means in European conditions, it may sound like a solution, but if we do that, we will have severe consequences for the whole value chain and human nutrition, such as quality protein supply for example.

That would have big impact in certain regions. Only recently, people were going after red meat. If you eliminate bovine animals in some parts of the EU, you will eliminate agriculture and human habitats, so how are we going to deal with this?

I come from a region in Finland where the last remaining sectors are very dependent on livestock, especially bovine animals. So if we eliminate bovine animals, are we going to produce something instead in terms of human food?

We may be. But then, I can assure you that the economic value and the livelihoods of those societies will be in serious danger because of the disappearance of agriculture and those conditions.

So, the message from our perspective is to say that the more diversity we maintain and develop different conditions, the more resilient we become, especially in stressful situations.

It doesn’t mean that we shouldn’t be looking at the sustainability requirements and we’re very happy to do it for our reasons too, but the reality is that if we don’t deliver what agriculture is supposed to deliver – food – we will never be able to justify our existence in society.

Talking about the effects this crisis will have, we also must talk about the labour market in agriculture. We see shortages of seasonal workers, especially in fruits and vegetables sector. There was a rather strange proposal from our agriculture minister here in Croatia that all those who are going to come out of this crisis unemployed, should go and work in the agricultural sector. What are your suggestions for overcoming this situation? 

We have to keep in mind that the key reason for the disruption in the labour market were the restrictions put in place for people. People couldn’t travel across the EU to go to work.
But then, the reality is that we do not have sufficient labour force in place, and as a consequence, some of the governments’ ministers have indicated that why don’t we have increase mobility within each economy, each of the member states, and offer jobs to individuals who were possibly laid off from other employment.

In some member states, there have been thousands of people who have indicated they would be willing to take this initiative and come work in the agriculture sector, but we also noticed that their expectations for what the work would be were somewhat different. It’s quite hard labour, and this is something that not all in the EU are prepared to do. Some member states are working hard with farm organisations, they have actually lifted some of these restrictions, and there has been some positive trend in that the agriculture sector is seen as an opportunity for employment.

The formidable issue here is, once again, that most of the consumers don’t want to pay the true price of the foodstuffs. They expect the food will be increasingly cheaper. And this is something we need to address. Will we go for ever-cheaper food?

I don’t think it’s sustainable. But what does it mean in practice? What are we going to do? If we have an increase in international trade, it means that we have cheaper raw materials, cheaper products coming across the border. How are we going to relate to that?

Do we say – it’s not sustainable, we don’t like that? At least so far, none of our consumers has said that. Very few people are willing to pay more for their food.

There are also problems with throwing food away due to the inability to sell…

This is another issue. We try to eliminate that as much as possible, because it’s not in the interest of farmers to produce foodstuffs for which they don’t have a market, that’s a waste of resources, waste f time, waste of economic value.

We really don’t like that and that’s exactly why we pushed so much on the measures dealing with labour market shortages, we saw that it would all be for nothing if we didn’t have the people doing the harvest, or planting the crops.

How much inequality is there in Europe in terms of food quality and the comparison of living standards and food prices?

We have seen some developments for instance in the United States, where there is a tendency that poorer people have sufficient food, but it’s usually rich in calories, which leads to health problems in the end.

The big question isn’t do we have access to food, but do we have proper access to good food? And this is exactly linked with the price. Because we will never have that much taxpayers’ money to make up for the difference. The concept of appreciation of food needs changing. We need to appreciate food in a different manner than how it was done in the past.

And even if you and I see this, we may understand and accept the reality, millions and millions of people out there won’t. And that is the big challenge for us.

It would be politically very difficult for our governments to tell the citizens, the taxpayers, that we need to pay more for food. I don’t see that. If they say this, they would lose the next election. That’s what ministers actually tell us, when we meet them – you’re right, we pay too little for our food, but the difficulty is, if I say that out loud, I won’t be minister in the next government.