20 May What is the European Green Deal and how does it affect agro-food companies?

The action plan to develop organic production, also known as the European Green Deal, is a set of strategies aimed at building a sustainable Europe before the year 2050. It’s a roadmap towards a more sustainable food system in all ways which also provides for new investments and generates growth.

The aim of the European Green Deal is to establish specific actions in all levels of the food chain in which organic production and the consumption of organic products play a key role. In fact, the goal is for 25% of all farmland in the European Union (EU) to be organic by 2030.

The premise underlying the European Green Deal is that organic agriculture must be the model to follow since it is, at least for the time being, the only sustainable farming system.  However, simply promoting organic farming would have no major impact especially considering that the proportion of household expenditure on food has dropped. The same is true with regard to the price of food, which has caused farming revenue to stay the same.

European Green Deal and organic agriculture

So, what exactly is the EU position? European authorities involved in the European Green Deal say that engaging in organic agriculture leads to higher costs due to the use of natural processes and substances which decreases yields. However, organic products are often sold at a higher price than traditional ones because consumers value the positive effect of organic agriculture on the environment. Thus, farmers earn more revenue which compensates for the losses in yield.

It seems clear, therefore, that there must be an emphasis on consumption in order for all of this to play out as intended. If people are aware of the benefits of consuming organic products (organic pulses, for example) due to their respect for nature, support for the agricultural system and the positive economic and environmental impact, the plan will work. At least that’s the theory behind the European Green Deal.

European Green Deal and organic consum

Yet, how is the EU going to convince people to consume organic products? Awareness and sensitisation are of course essential, but they must be backed by economic measures. Thus, the European Green Deal encourages including organic products on the menu at schools and workplace cafeterias through public contracts. In other words, it intends for the use of organic products to have a specific score which influences the choice of one company or another when providing these services along with other factors such as their economic bids.

It also intends to do the same in the hotel and restaurant sector through incentives and visibility measures as well as in supermarkets with promotional campaigns. Likewise, the European Green Deal also aims to get organic products into household kitchens. In order to do so, the number of people with access to organic food must increase and, therefore, there must be economic aid for families whose incomes do not allow them to add to the price of their shopping basket.

At the same time, there must be a change from traditional to organic growing. This is a very important step for farmers which also involves an economic cost. That’s why the European Green Deal provides for incentives for those who commit to the change as well as the possibility of participating in training activities.

The 3 Core Ideas of the European Green Deal

There are three core ideas behind the European Green Deal which represent the food supply chain: production, transformation and retailers and consumers. Thus, there are three major lines of action:

⇒ Stimulating the demand and guaranteeing consumer trust by promoting organic agriculture and the Euro Leaf logotype, encouraging organic canteens and cafeterias through organic public contracting, reinforcing organic school programmes, preventing food fraud, enhancing traceability and contributing to the private sector.

⇒ Stimulating conversion and consolidating all levels of the value chain by fostering investment and best practices with their inclusion in Common Agricultural Policy aid, compiling and disseminating market data, improving animal diets and strengthening organic aquiculture.

⇒ Increasing the contribution of organic agriculture to sustainability by reducing the climate footprint, improving genetic biodiversity, increasing yields, creating alternatives to phytosanitary products and using resources more efficiently.

Therefore, in order for organic products to be a success and have a profitable market for farmers, there must be incentives for demand which will then entice farmers to transform their traditional crops into organic ones. However, incentives are also necessary to speed up or expand this effect as the goal of turning 25% of all farmland organic by 2050 is quite ambitious. And, what’s more, continued research and enhancing the contribution thereof to overcoming environmental challenges will be fundamental in order to prove the importance of the organic sector.