Why does food system reform stall?

Professor Alan Matthews gave the presidential address at the 100th conference of the Society of Agricultural Economics held in Oxford earlier this year.  The Princess Royal, Princess Anne, was present for the address and commended the concept of academics as 'honest brokers'.   I had the privilege of reading this and commenting on it in draft form.   The revised version has now been made available on an early view basis in the Journal of Agricultural Economics.   

I found the concept of ideal type policy ontologies particularly helpful.

Here is the abstract: 

Agricultural and food policy is increasingly shaped by geopolitical instability, ecological constraints, technological disruption, political polarisation and declining trust in expertise. At the same time, calls for food system transformation have gained prominence as evidence accumulates on the environmental, health and social shortcomings of current food systems. Yet reform has frequently stalled despite extensive scientific analysis and broad recognition of the need for change. This paper examines why. 

After reviewing some traditional explanations for policy persistence, the paper introduces the concept of policy ontologies: underlying ways of understanding what the food system is, how it functions, what it is ultimately for and how change occurs. Three ideal-type ontologies are identified: a productivity ontology, a power-focused ontology and an ecological ontology. These ontologies shape the definition of policy problems and the selection of preferred policy responses, helping to explain why stakeholders often appear to talk past one another. 

As the Society begins its second century in a more turbulent and contested policy environment, the profession's central role remains the production of rigorous evidence. That contribution will be strengthened by a greater awareness of the different ways in which food systems are understood and of how these perspectives shape both policy debates and the interpretation of evidence. Recognising these underlying assumptions can help agricultural economists contribute more effectively to policy debate as honest brokers of policy alternatives.

The farm finance conundrum

Professor Alan Matthews writes: 'DG AGRI EU Agriculture and Food has published a news item 'Access to finance: unlocking investment for Europe’s next generation of farmers' which states that affordable credit is one of the biggest barriers to entering agriculture for younger farmers.

I am puzzled by some of the inconsistencies in the item. For example, it states that across Europe young farmers tend to operate smaller farms. This is factually incorrect, as is documented in the DG AGRI Analytical Brief No. 10 on young farmers in EU agriculture which makes clear that young farmers tend to operate larger farms than the average (an average of 26 ha compared to an average of 16 ha for other farmers) and that on average they are also bigger in economic size terms.

The news item also highlights that young farmers have higher debt ratios than older generations, a fact confirmed in the Analytical Brief. But this does not support the view that young farmers are necessarily shut out of the credit market - otherwise how would they become more indebted? 

I do not dispute that young farmers due to a lack of a credit history may find it difficult to obtain credit finance, and no doubt all businesses would like to see easier access to credit, but does the evidence suggest that young farmers have greater difficulty than other farmers? Of course, we all want to see more young farmers in the industry, but is this focus on credit a bit of a red herring when the real issue is the large number of older farmers beyond pension age continuing to farm and to draw down CAP payments?'

 

In the distant past (1994/5) I took part in a multi-country study of farm finance, contributing the coverage of the UK and the Republic of Ireland.  (The US, Canada, France and Germany also featured). I had some fascinating interviews with bankers, government officials, accountants and farm organisations and I wish we had published more from the study (I had a very able Irish research assistant who undertook a lot of archival work on the history of farm finance in the UK and Ireland.)

The interviews reports are lodged with the Modern Records Centre at Warwick University.

If I was to summarise the findings in one sentence I would say that farmers, or at least larger scale ones, had some pretty good financial deals (and tax concessions).

It is, of course, hard for younger farmers to break in, but that has much to do with older farmers clinging on, as I know from my own family.

The continuing power of the farm lobby

Behind the scenes the agricultural lobby is a sprawling, complex machine with vast financial resources, deep political connections and a sophisticated network of legal and public relations experts, argues the Financial Times in a Big Read analysis. “The farm lobby has been one of the most successful lobbies in Europe in terms of relentlessly getting what they want over a very long time,” says Ariel Brunner, Europe director of non-governmental organisation BirdLife International.  Industry groups spend between €9.35mn and €11.54mn a year lobbying Brussels alone, according to a recent report by the Changing Markets Foundation, another NGO.

Food systems are responsible for between 21 and 37 per cent of greenhouse gas emissions depending on what is included, according to the Intergovernmental Panel on Climate Change. Over half of those emissions come from animal faming alone. Yet agriculture remains one of the last sectors in developed countries still to face binding limits on its carbon emissions. It is one of the few industries not covered in the EU’s emissions trading system, although proposals are under discussion.

The regular meetings between Copa-Cogeca, the umbrella body for farming unions and co-operative bodies across the EU, and the bloc’s officials show that the reach of the agribusiness lobby has been “institutionalised”, says BirdLife’s Brunner. Patrick Pagani, acting secretary-general of Copa-Cogeca, counters that lobbying is normal practice and “transparent” because the body publishes videos of its presidents’ main points.

Farmers in Europe say they are being strangled with red tape at a time when many are struggling with rising input costs following the Covid-19 pandemic and the war in Ukraine, which inflated energy and fertiliser prices. The EU’s Green Deal climate law, drafted in 2019, set out proposals to cut pesticide use and improve food systems, as well as reduce emissions from industrial-scale farms.

In the EU, lobby groups are already staking out positions ahead of the next major revision of the Common Agricultural Policy, which will take effect in 2028. The present iteration has been criticised by farmers for its attempts to tie payments to better environmental performance and cuts to pesticide usage. Following widespread protests, European Commission president Ursula von der Leyen has pledged that the next CAP will be “targeted” and find “the right balance between incentives, investments and regulation”.

Who benefits?

Research suggests that big farms and landowners reap far greater benefits from subsidy packages than small-scale growers, even though the latter are often the public face of lobbying efforts.

That has led to some tensions within the sector.  It has been suggested that the agricultural lobby “hijacked” the spring protests and put the emphasis on deregulation, which served the interest of the biggest industrial farms and agribusinesses, when the main concern of ordinary farmers was insufficient incomes.

FNSEA, France’s largest farming lobby has been accused of having ‘ no interest in securing income for farmers” but “a huge interest” in driving pesticide usage, because FNSEA is headed by Arnaud Rousseau, chair of agro-industrial company Avril.  At the EU level, Marion Picot, secretary-general of CEJA, the bloc’s main body for young farmers, says its members often feel drowned out by more dominant voices in Copa-Cogeca. “We are trying to make sure that young farmers are visible in other farming groups.”

In farm policy, it often seems that benefits go to those already doing well.

Alan Matthews sets out his views on the future of EU agripolicy in the light of the European Parliament elections here: https://www.europenowjournal.org/2024/08/15/thinking-the-future-of-agrifood-policy-in-light-of-the-eu-parliament-elections/

Farmer protests and the EP elections

Alan Matthews writes here about farmer protests and the 2024 European Parliament elections: https://www.intereconomics.eu/contents/year/2024/number/2/article/farmer-protests-and-the-2024-european-parliament-elections.html

He states:'This article looks at the origins of this recent wave of farm protests and asks whether a crisis situation exists in European farming as the Commission has suggested. It examines the measures that have been adopted and proposed in response. These measures, while consistent with the previously existing trend to roll back elements of the Green Deal, are in themselves limited in scope.'

'While signalling a willingness to respond to farmers’ concerns, they are unlikely to significantly change their situation. More radical changes have been put on the table, and these elements will play a role in the European Parliament elections in June 2024.'

Look out for an article from him to appear soon online from Political Quarterly.

A shortage of experts

The Sunday Express once named me as one of the five hundred most influential people in Britain because I was the only person who understood the Common Agricultural Policy. This was wrong on two counts. First, I have never fully understood the CAP: I am always making new discoveries about its complexities.

Second, there are a dozen or so academics in Britain who understand the CAP better than I do from the disciplines of economics (Alan Swinbank, Alan Matthews), law (Michael Cardwell) and political science (Alan Greer). Conspiracy theorists may wish to note that three of them are called Alan: is this a derivation of 'alien'?

Sometimes the media contact me on the assumption that as I know something about the CAP, I must understand the Common Fisheries Policy as well. It is a mystery to me. I know that we have had enough of experts, but the one academic expert on the CFP that I knew has long since retired. I am aware that there are some conflicts about fishing stocks between marine biologists and fisher folk. The best short account I can find of the CFP is here: Senior European Exp**ts

What is clear is that fishermen (they are mostly male) do follow a very dangerous and demanding occupation and live in tight knit communities. They have been vociferous in their criticisms of the CFP and bringing it to an end is one of the core demands of Brexiteers who see it as an affront to British sovereignty and an area where we need to take back control.

The fact that the EU now appears to be using the CFP as a bargaining chip in the negotiation is potentially politically explosive. Continued access for EU fishing vessels to UK territorial waters in accordance with existing fishing rights is being advanced as a trade off against tariffs on agricultural products and, more importantly processed food and drink products to the EU.

But we should remember that this is a negotiation. Each side is going to push its own interests and perspectives, but ultimately there is a mutual interest in finding common ground. Hopefully.

Consequences of Brexit for UK agriculture

This article summarises a contribution I made to a recent edition of EuroChoices on the consequences of Brexit for UK agriculture, along with summaries of contributions by Alan Matthews and Alan Swinbank: Brexit uncertainties