Food Security and the EU’s Common Agricultural Policy: Facts Against Fears
Valentin Zahrnt, ECIPE (2011).
The European Commission, the European Parliament and many member states have proposed food security as a key theme for the post-2013 CAP. In its recent communication ‘The CAP towards 2020’, DG Agriculture, for instance, highlights the need to preserve the EU’s food production potential, ‘so as to guarantee long-term food security for European citizens’. All this has turned food security into the most pervasive and powerful argument of those calling for the protection of EU agriculture.
This raises three questions: first, to what extent is food security actually endangered in the EU? Second, what precisely are the dangers to EU food security and which policy instruments are most appropriate to counteract them? Third, how should the EU contribute to global food security?
This paper finds that EU food production per capita has constantly increased in the past and far outstrips dietary energy requirements. The share of income that households spend on food has steadily declined. By now, food prices are so low compared to income that even a 10-fold increase in the farm gate price of staple crops would be far off from provoking food scarcity in the EU. Forecasts predict roughly stable or increasing production quantities for the EU – even in the case of subsidy and tariff cuts. The expected main effect of climate change during the coming decades will be to shift production from southern to northern Europe without significantly curtailing overall production.
If food prices rose dramatically, the EU could increase the agricultural area used for growing cereals; in particular, by cutting back on biofuel and livestock production. Furthermore, agricultural labor and capital input could be multiplied. An additional measure would be to enhance investments into agricultural productivity.
Therefore, the EU does not depend on imports for its food security. In any case, most EU imports are not staple necessities but luxury items, such as coffee, tea and flowers, or feedstuff. Nevertheless, it is worth mentioning that EU food imports are reasonably reliable. World food trade is expanding; the number of countries with strong food exporting capabilities is increasing; export restrictions are rare and limited in scope; and key EU trading partners have stable, liberal trading regimes. Furthermore, food is a homogenous good traded on stock markets – that is, any one supplier can easily be replaced by another.
Farm income and market price support, which are the centerpieces of current EU agricultural policies, are irrelevant for the high level of food security that Europe enjoys in the short- and medium-term. It is open to debate whether they exercise a small beneficial or detrimental effect. However, these instruments deteriorate food security perspectives for the second half of the 21st century. Research and development, as well as protection of genetic and other environmental resources, constitute more appropriate measures to ensure long-term food security in the EU. Food security is thus a weak argument for a ‘strong’ CAP.
Global food security – or, in more traditional terminology, world hunger – remains a serious concern. However, even at the global level, current food supplies are sufficient to nourish the world population. Food insecurity, therefore, results from uneven distribution. In the coming decades, calorific production is projected to further outpace population growth.
Farm income and price support in the EU is at best an absurdly inefficient approach to contributing to global food security, if its net effects are not outright harmful. Investments into agricultural research, farm advisory systems, improvements in agricultural property rights and markets, and rural infrastructure in developing countries promise much higher returns in the fight against hunger. Moreover, further liberalization of EU agriculture would create a signal for developing countries to abstain from expensive and distorting interventions in their agricultural markets.
Read the study here.