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Production standards for food safety, animal welfare and the environment

What old-style CAP defenders claim

The CAP compensates European farmers who have to comply with strict food safety, animal welfare and environmental legislation. Without such support, agricultural production will be transferred abroad where standards are lower.

Few disadvantages for EU farming

Several considerations speak against leakage of production to foreign countries with less demanding standards.

  • Imported food must in any case meet many of the EU’s legal minimum standards, notably those on human, animal, and plant health.
  • An ever increasing share of food is sold by brands and retailers that impose their own, more demanding standards. Foreign farmers who want to produce for these brands and retailers have to comply with the very same standards as EU farmers.
  • When EU producers have to comply with stricter standards than their foreign competitors, it is not solely to their detriment. High standards increase consumer confidence in the safety of EU products, and also their respect for environmental and animal welfare values.
  • High hygiene standards furthermore improve animal and plant health, and traceability requirements enable more targeted intervention in the case of pest and disease outbreaks. Farmers therefore incur fewer losses.
  • The costs EU farmers incur by complying with legal minimum standards that do not apply to foreign farmers appear generally moderate. Even with regard to animal welfare, where compliance costs are particularly high and cannot largely be recuperated through price premia, pressures to relocate production are mostly minor.

… but tremendous advantages

Looking at potential disadvantages, one must not forget that, on the whole, European farmers benefit from excellent conditions.

  • Climate is mostly moderate, precipitation is relatively regular, and many soils are fertile.
  • Technology and advice are easily accessible, markets for production inputs – from farm buildings to fertilizer – work smoothly, property rights for land are clearly defined and reliably enforced.
  • The world's biggest market for agricultural production, the EU, is at their fingertips.

What an advantage compared to developing country farmers who may face lower standards but are at the mercy of droughts or hurricanes, disorganized input and credit markets, insecure property rights and difficult market access.

One size does not fit all

If some agricultural production is transferred in response to high EU standards, this is not inevitably undesirable. Most environmental problems caused by agriculture are local – for instance, ground water pollution or soil erosion. It is therefore efficient that every country decides on the environmental standards that best conform to its level of development and other characteristics, such as population density and non-agricultural sources of environmental pollution. Since one size does not fit all, every country should be free to set the standards best suited to its needs and agricultural production should be free to adapt. (In the case of agriculture, as argued above, this does not lead to a regulatory ‘race to the bottom’ to prevent relocation of production.)

EU farming is not always better

Even where a global public good is concerned, such as biodiversity or the climate, it is not clear whether a country with higher standards has indeed a better environmental performance. European farmers may employ relatively polluting production techniques despite the high environmental standards in the EU. For instance, land may be scarcer in Europe, while agro-chemicals and machines may be better available, than in other countries. Or the cold winters in many European member states may require using energy to keep animals in stables, whereas animals can graze freely in other countries throughout the year. A transfer of production to countries with lower standards is not necessarily harmful to the global environmental commons.

Conclusion

Compensation for strict food safety, animal welfare and environmental legislation should be paid only selectively where major undesirable dislocation of production is at stake. Otherwise, farmers should incur the full costs of compliance with EU legislation, as it is the rule with any other business. The EU has comparably high standards everywhere – from industrial emissions to the registration of chemicals to worker rights. It would be unviable to compensate every business for the extra costs resulting from EU legislation.

A different issue is whether farmers should receive subsidies for exceeding legal minimum requirements. The current CAP dedicates only a derisory amount of money to reward such special efforts. It may be desirable to set greater incentives for farmers to respect animal welfare. Certainly, more subsidies should be paid for ecological performance above minimum requirements.