Commissioner Janusz Wojciechowski announced at the informal Council meeting in Koblenz that he is in charge of drawing up a plan to ensure food security in case of future crises. Furthermore, opening up to pressure from MEPs, the Commissioner expressed his willingness to make the €8 current billion (7.5 billion constant euros) recovery funds decided for the sector available from January 2021.
For details on the Authorisations for State aid schemes: https://ec.europa.eu/commission/presscorner/home/en
08/21 The UK’s National Farmers Union stressed the importance of food security
The UK’s National Farmers Union (NFU) has stressed the importance of delivering food security as part of a recovery from the COVID-‐19 pandemic, on the day on which the country would, hypothetically run out of food without imports. The farm union said that Aug 21 is the notional date on which home produced food would run out. UK self sufficiency is at 64%, a level which the NFU says “has remained stagnant for a number of years.” It put self sufficiency in fruit at 18%, in fresh vegetables at 55% & in potatoes at 71%.
NFU President Minette Batters said that “being able to feed our population is absolutely critical.” “Shocks can expose fragilities in any reliance on imports”. “Imports will always play a crucial role in our food system,” but “our own self-‐sufficiency must be paid more attention by government.”
08/21 A budget extension for French viticulture, but a crisis still persist
At the beginning of August, the French government announced new aid for the wine industry. 76 million in addition to the 170 million euros intended to finance storage and distillation of unsold wines. A package that will not enable the sector, however, to get out of the crisis, says Jean-‐Marie Fabre, president of the independent winegrowers’ union.
“This budget of 246 million euros allows us to meet these two objectives [storage and distillation of unsold products, editor’s note], for this year. Unfortunately, our companies, especially the independent winegrowers, will not be able to make it through in the medium term. They lost on average 62% of their turnover from March 15 to June 21. For the entire sector, this represents a net loss of 4 to 5 billion euros. From spring until to the harvest, is the period when we hire the most casual employees. Today, companies are in the red. An effort will have to be made on exemptions from charges, as has been done for tourism, culture, aeronautics and the automobile industry. »
08/23 Italian wine’s exports dry up
Exports of Italian wine are drying up as the coronavirus batters demand on a level not seen for 30 years, the agricultural trade union Coldiretti said.
Consumption of Italian wine in China dropped 44 percent in the period between January and May, (data compiled by the national statistics institute Istat). In France, it dropped 14 percent and in Britain – where uncertainty over Brexit also played a role – it fell 12 percent.
By contrast, exports to Germany and the United States – where punitive customs duties could cloud the trend in future – were stable over the same period, slipping by just one percent.
Wine is Italy’s main agricultural earner in the US, with exports amounting to 1.5 billion euros ($1.8 billion) annually. In 2019, Italy exported a total 6.4 billion euros worth of wine overall.
In June, the Italian government adopted a decree allowing some 70 million bottles of surplus wine stocks to be turned into hand sanitizer gel to ease shortages as the virus took hold.
08/25 Authorizations for State aid schemes
The European Commission approved an Irish plan to support the beef sector with an aid worth €50 million; the beef finisher payment scheme will be in the form of direct grants & will be available to farmers & companies active in the beef sector.
08/25 French state aid for work-linked training
In France, two decrees creating exceptional assistance for employers who hire work-‐study students (apprentices and young people on a professionalization contract) were published in the OJ. They provide for aid of €5,000 for the recruitment of a work-‐study student under 18 and €8,000 for a work-‐study student older than 18, for contracts concluded between 1 July 2020 and 28 February 2021 preparing for a title or diploma up to a master’s degree (level 7 of the RNCP).
The aid will be paid unconditionally to companies with fewer than 250 employees and may be requested by associations. In addition, it will replace the one-‐off aid for eligible companies during the first year of the work-‐study contract. Companies with at least 250 employees must, in order to receive the aid, undertake to achieve a percentage of alternating workers in their workforce by 31 December 2021. This measure will make it possible to cover 80 to 100% of the salary of an apprentice and 50 to 65% of the salary of a young person on a work-‐study contract, according to the Ministry of Labour.
This scheme, with a total budget of €6.5 billion, aims to facilitate the entry of young people into working life in the wake of the coronavirus pandemic and provides, among other things,
€4,000 in aid for the recruitment of under-‐25s in the form of compensation for expenses.
08/26 Authorizations for State aid schemes
The European Commission approved a scheme by Cyprus to spend €500 000 on support for the pig sector, “in the context of” the coronavirus pandemic. The support will be open to any legal or natural person who owns or manages a pig unit where breeding sows are reared.
08/27 Swiss viticulture also in difficulty
According to Alexandre Fischer, a winegrower in Yens (VD), the storage capacities are still full for the 2019 harvest, and some cellars do not know where to store the 2020 harvest. This problem is partially solved with the cantonal authorities’ prescription to reduce harvest quotas. The shortfall is compensated by public aid.
The Confederation has also come to the rescue of the sector with Covid-19 aid. Faced with unsold wines, it prescribed the downgrading of good quality wine – 2019 was a good vintage
‐ to table wine, which yields less but sells better. “The compensation of 2 francs per liter downgraded is far too low to hope to make a living out of it, deplores Alexandre Fischer. Even if many wineries preferred to sell at a loss to ensure liquidity”.
Another measure: the Swiss Winegrowers’ Federation has negotiated the sale of wine so that it can be transformed into a hydroalcoholic solution. In April, about 700 winegrowers responded to the call to deliver up to 3,000 liters each of pinot, chasselas and other crus for 2.50 francs a liter.
No less than 98% of Swiss wine is consumed in the country, but this is only 35% of total consumption. The rest is imported, mainly from France, Italy and Spain. Alexandre Fischer asks the Confederation to increase the national quota and to take measures to reduce imports. In reality, the quotas are never reached and, according to the Swiss industry, imports compete unfairly with domestic production. Alexandre Fischer denounces European wine, which does not respect the social and environmental production standards in force in Switzerland.
The “Grapes of Wrath” movement is mobilizing so that both chambers approve a motion that would oblige wine importers to also market a share of Swiss wine. Another solution is to restrict wine buying tourism in neighboring countries from five to two liters per person. The winegrowers are calling for a reversal of the Federal Council’s 2014 decision to increase the duty-‐free import quota from two to five liters per person.
08/27 Severe summer tourist balance sheet in Italy
Covid has caused a 30% drop in tourist spending for foodstuff due to the absence of foreign tourists and the reduced economic availability of Italian tourists affected by the crisis.
08/28 Authorizations for State aid schemes
The European Commission approved a Bulgarian scheme, worth BGN 56.6 million (approximately €29m) to support breeders of large & small ruminants & potato growers affected by the COVID-‐19 pandemic. Designed to address liquidity issues & help recipients continue their activities, the support plan involves paying direct grants to cover part of the principal & interest due on loans previously provided by the State Fund for Agriculture.
08/31 Authorizations for State aid schemes
The European Commission approved a €5 million Portuguese credit line scheme to support SMEs in farming & agri-‐food in Madeira. The support will be in the form of subsidised interest rates, & is designed to address liquidity shortages. The credit provides in advance support, which would be available under the POSEI scheme. Loan contracts under the credit arrangement have to be signed by Dec 31, 2020 & will mature in one year. The total amount granted to each company may not be more than 25% of its turnover in 2019 or twice its wage bill that year.
09/01 A community plan for food security
Commissioner Janusz Wojciechowski informed ministers that he is taking charge of drawing up a plan for ensuring food security during future crises. Food supply was “never really at risk,” but “uncoordinated measures by Member States to restrict the free movement of goods & persons put unnecessary pressure on our supply chains”.
He insisted that “protectionism is not the answer.” “Functioning of the internal market is essential in keeping the supply chain intact,” and “international trade is part of the solution not part of the problem when addressing the food security issue.” He also pointed out that some sectors were more vulnerable than others & blanket measures can be counterproductive. “We need to preserve the affordability of food, while generating fairer economic returns to those who ensure food provision on a daily basis”.
According to Ministers, COVID-‐19 crisis reminded the EU that it needs to become more self-‐sufficient in food, with the Union’s massive plant protein deficit an issue underlined by many delegations around the table.
09/03 Authorizations for State aid schemes
The European Commission approved two Romanian schemes to support pig & poultry breeding, with a value of €47.4 million (approximately RON 229.4m). Some €24.7m (around RON 119.6m) of financial assistance has been earmarked for the pig sector, with €22.7m (roughly RON 109.8m) for the poultry sector. The support, to be paid in the form of direct grants, is designed to handle the sectors’ liquidity needs & enable businesses to continue their activities. More than a thousand companies are expected to benefit in each sector.
09/03 1.2 billion euros for French agriculture
Within the framework of the €100 billion French economic recovery plan presented by the government, €1.2 billion is dedicated to agriculture, and particularly to the agro-‐ecological transition:
– 400 million euros to “speed up the agro-‐ecological transition in the service of healthy, safe, sustainable, local and quality food for all”.
– 250 million euros for the animal sectors (modernization, health security and animal welfare)
– 250 million for the renewal and development of agro-‐equipment needed for agro-‐ecological transition and adaptation to climate change
– 100 million euros for the protein plan
The plan also includes €200 million to “help forests adapt to and mitigate climate change”.
According to the Minister for Agriculture Julien Denormandie, this plan “makes it possible to support farmers, many of whom have already begun the transition to a more sustainable, environmentally friendly and economically robust model. Faced with the increasing number of climatic hazards, adapting to the ecological emergency is a question of independence”.
To accompany this ecological transition, the recovery plan includes the creation of an HVE tax credit, similar to the organic tax credit, which is being maintained. Assistance in drawing up a carbon balance sheet for newly established farmers is planned.
The government is also announcing the introduction of a conversion premium for agro-‐equipment so that they can invest in “more resource-‐efficient tools”. Support for the planting of hedges is also planned.
The recovery plan also intends to support school canteens in small villages to enable them to obtain local supplies.
In the face of climatic hazards, particularly hail or frost, the plan includes support for investment in protective equipment.
Finally, a public communication campaign will be launched to publicise jobs and training in agriculture and food processing and the recruitment needs.
09/03 Public aid not used by the Italian wine industry will remain available
“The resources not used for some of the interventions approved during the health emergency will remain at the disposal of the wine sector”, reiterated the Minister of Agriculture, Teresa Bellanova, at a press conference on the 2020 harvest. “Perhaps not all the measures identified have had the result imagined at the outset. I am thinking – the minister added – of the measure on distillation, defined after an equally complicated comparison with the Regions, which absorbed 14 of the 50 million allocated. Resources that will remain available to the sector. And then I am thinking of the 100 million euro measure for the containment of production, where just under 39 million euros have been used: in this case too, the funds will be reactivated in favor of the sector but will have to be spent by the end of this year”. “I welcome the idea of raising the ceiling of the CMO promotion budget from 100 to 150 million euros/year for the next three years” added the minister.
For the Secretary General of the Italian Wine Union (UIV), Paolo Castelletti, “regarding the remaining 60 million euros unspent on the yield reduction measure, we consider it essential to reactivate them in favour of active measures for the wine sector. The deadline is very short and, for this reason, the choice could go in the direction of distillation for wines with a denomination on the French model. For the real concerns concern quality wines, which have not found their place in the retail trade”.
09/04 Launch of the agricultural support plans in Italy
The exceptional plans of the Italian Regions put in place to face the Covid crisis via a lump sum contribution could reach a flat-‐rate contribution of up to 7,000 euros per farmer and 50,000 for small and medium-‐sized food-‐ processing companies are launched.
So far, the Regions launched projects worth 140 million, most of which have promoted agro-‐tourism and social farms.
The resources used are those of the various EU-‐funded rural development plans that are unspent. As a result, not all regions have the same financial availabilities.
Amongst others, Veneto has so far committed €23 million, Calabria 21, Lombardy 19.5, Tuscany 18.9, Piedmont 10, Abruzzo 9.5, Umbria 7, Marche 6.5, Liguria 6.2, Campania 6, Sardinia 4, Friuli
Venezia Giulia 3.3, Emilia Romagna 2.9, Basilicata 1.6 and Valle d’Aosta 310,000 euros.
The aid to be paid by 30 June 2021 varies from region to region, with a ceiling per farm of 7 000 euros in Marche, Calabria, Friuli Venezia Giulia, Campania, Umbria, Basilicata and Liguria, while the ceiling falls to 5 000 euros in Lombardy and Valle d’Aosta, 4 000 euros in Veneto and 2 000 euros in Emilia Romagna.
Veneto has bet on white veal calves, milk and vegetables, Lombardy on floriculture and meat farming, Calabria on flowers, milk and wine, Piedmont on floriculture, livestock farming and beekeeping, Marche on livestock farming and Liguria on all sectors.
09/07 Irish credit guarantee scheme launching
The small Irish businesses, including farmers and fishers, will be able to borrow more cheaply under the €2bn Covid-‐19 credit guarantee scheme finally being launched after
four-‐month wait. Banks are expected to begin taking applications following a Government event.The scheme offers loans of €10,000 to €1m at below-‐market rates to small and medium-‐ sized enterprises (SMEs) initially via AIB, Bank of Ireland and Ulster Bank. It includes provisions for unsecured loans of up to €250,000.
But the Irish SME Association says the cost for most firms still will be too high.
Taxpayers will underwrite 80% of the risk. This is designed to spur retail banks to lend more at a time when they already face business loan defaults topping €1bn on their books.
Just like Ireland, the UK, Austria, Denmark and Portugal are offering 80% taxpayer-‐backed guarantees on their emergency SME loans. Authorities in Spain and Sweden are underwriting 70% of risk, the French 90%.
Banks will have some flexibility to set rates in line with each customer’s risk profile, but rates are expected to be significantly below current market rates exceeding 5% on SME loans.
Unlike the State’s previous credit guarantee, this one will allow applications of primary agri-‐ food producers, including farmers and fishers.
Nonetheless, surveys consistently show most firms are loathe to take on new debt. This has been reflected in modest uptake of other Covid-19 loan support.
09/07 Commissioner Wojciechowski pushes for using the recovery fund as soon as possible
During his intervention at the AGRI Committee, beside touching the points of the recovery plan, the market situations, the CAP and the MFF, Agriculture Commissioner Wojciechowski expressed his willingness to make the available recovery funds for the sector, amounting to €7,5 billion, as soon as January 2021.
(For more details: cf. email of September 9th “ComAgri -‐ September 7th”)
09/08 £100m fund to improve Wale’s food resilience
“The Welsh government announced a three-‐years plan with the aim to enhance the country’s rural economy following the pandemic. The aids will go to investments in helping farmers improve their on-‐farm biodiversity and by introducing new technologies and equipment. The schemes will be founded through a combination of the EU Rural Development Programme (2014-‐20), and from the Welsh’s government own funds for a total of £100 million”.
09/08 Authorizations for State aid schemes
The European Commission approved a Maltese scheme worth €1.5 million to support farmers affected by the COVID-‐19 pandemic. The financial support scheme is designed to help farmers deal with liquidity shortages caused by the outbreak.
09/09 Authorizations for State aid schemes
The European Commission approved a €7.4 million Romanian scheme to support the bovine breeding sector following the pandemic. Worth some RON 35.7m, the scheme will provide direct grants to companies in the sector, enabling them to address liquidity needs & keep active. It is expected to benefit over 1 000 companies.
09/10 Wallonia aid for producers of potatoes
The Walloon government has decided to grant an aid for the year 2020 to producers of ware potatoes who own a stock of over-‐the-‐counter potatoes. The aid will cover up to 50€ per ton, considering that the loss related to the pandemic caused is estimated between €40 and €50 million.