Is the EU Green Deal a dead duck?

There is a theme in the current narrative that suggests that the electorate was misled, stupid, or both, or that the low voter turnout meant that the right people just didn’t exercise their right. This, combined with the age-old canard that small political parties that ‘do the right thing’ just never get thanked or voted back in, is probably the biggest turkey you’ve seen or heard all Christmas.

History really does repeat itself
Those who forget the mistakes of the past are condemned to repeat them. Arrogance and detachment from reality are poor foundations for implementing change, whether that’s in agriculture or transport, or in the public versus private balance of transport options and investment.
Deeming Irish climate-change policy as a purely agricultural-production issue (in my view, the line taken by the Green Party, and certain facets of the media, etc.) rather than a fossil-fuel-decarbonisation challenge (the line taken by the rest of the world) was always outrageous. Climate-change policy is, at its core, a change management process and you don’t deliver change by vilifying and marginalising.
Meanwhile, back in the real world, the imminent conclusion of the Mercosur deal just adds to the very real sense of disconnect between EU policy as it applies to EU food production, and EU trade policy as it strives to give away more and more of the EU food market, in particular to South American meat imports that are blatantly produced to lower environmental and regulatory
standards .

Loss of credibility
In credibility terms, it’s hard not to feel that the EU Green Deal is pretty much a dead duck. We all recognise that the politics of Mercosur is that improved access to the South American auto market is seen to offer some hope to an ailing German car sector, in particular. However, the impact of increased access to the EU market for lower priced (and lower specification) meat from South America, combined with the EU Green Deal policy of imposing ever increasing costs through increasing regulations/restrictions on EU produce, is a recipe for further weakening an EU/Irish beef sector that is already under pressure, as witnessed by the reduction in the beef suckler herd.
Moreover, the irony around reducing tariffs on inferior, high-carbon-footprint South American meats, while increasing tariffs on low-carbon electric
vehicles from China, does not speak to much joined up thinking in the higher echelons of the EU. Indeed, it speaks more to the age-old EU policy of positioning EU food and agri production as a giveaway in trade talks.

Investment focus
A major tenet of Mario Draghi’s paper on the challenges for EU economic development relates to the need to encourage greater levels of investment in the EU, given that EU investment across a range of developing technologies including electric vehicles, artificial intelligence, high-tech and pharmaceuticals, as well as semi-conductor production, has fallen behind US and Chinese levels. In the US, President Biden’s huge support for investment through the 2021 US Inflation Reduction Act – similar to the Chinese subsidisation of its ever-increasing capability in electric vehicles – was intended to increase funding for R&D in emerging technologies and, at the same time, reduce business risk for investors.
Not only is the EU incredibly slow to ease its State-aid rules restrictions to facilitate State support that would underpin investment and lower business risk in general, but there also seems to be zero recognition that all of the business risk associated with EU food production lies with the producer/supplier.
What this means, very explicitly, is that when a new trade deal allows lower priced food products onto the EU market, or an EU regulation/directive imposes higher productions costs or constraints, or indeed both of these occur at the same time, the business risk associated with producing food in the EU increases and the economic incentive to import cheaper, lower-cost, lower regulated products from outside the EU also increases.

Major EU policy shift required
Can you imagine the uproar in Germany if the product entering the EU market and undercutting German production was a diesel-engine car?
Basically, that’s where EU food producers find themselves at the moment. A major shift in EU agricultural policy based on joined-up thinking and looking at pricing policies across a range of other consumer products is needed.
The continued use/abuse of fresh food as loss leader in EU supermarkets and discounters must be banned and a business-risk-based measure must be introduced requiring 52-week price compensation where loss leading is a norm. The development of a meaningful EU-wide crop insurance system similar to the one in place in the US, but also more broadly applied in the meat and dairy sectors as well as crops, to better balance business risk in EU food production, must be a priority. Let’s face it, the EU is not going to cease doing trade deals that use EU agri as a giveaway anytime soon. Nor is it going to diminish the ever-increasing burden of regulation and restraint. That being the case, it’s time to introduce intervening innovations in food pricing and/or income supports as a quid pro quo to protect both food production and food producers.