The vulnerability of the European agriculture and food system for calamities and geopolitics A ...

159 Pages·2011·1.13 MB·English

The vulnerability of
the European agriculture and food system
for calamities and geopolitics
A stress test

Report and advisory document
to the Dutch Minister of
Economic Affairs, Agriculture and Innovation

June 2011

Platform Agriculture, Innovation and Society
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Table of contents

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A. Report ix
.....................................................................................................................

Summary of report and advice xiii
.....................................................................

1. Introduction 1
...........................................................................................................
Food crisis ................................................................................................................1
Causes ................................................................................................................1
Recent developments......................................................................................................3
Is the EU also vulnerable?..............................................................................................4
This report ................................................................................................................4

2. Risk-increasing trends 7
.....................................................................................
Growth in world population, welfare and meat consumption...........................................7
Globalisation ................................................................................................................7
Liberalisation ................................................................................................................8
Vulnerable world trade system........................................................................................8
Resource nationalism, state companies and geopolitics...................................................8
Interrelationship with the energy market.......................................................................11
Water scarcity ..............................................................................................................11
Climate change.............................................................................................................12
Diminishing returns......................................................................................................12
Land degradation..........................................................................................................13
Scarcity of phosphate and micronutrients......................................................................13
Depletion of fish stocks................................................................................................14
Loss of biodiversity......................................................................................................14
Risk-reducing factors....................................................................................................14
Conclusion ..............................................................................................................15

3. Research questions and methods 17
.............................................................

4. Possible calamities 19
............................................................................................
Assumptions ..............................................................................................................19
Self-sufficiency............................................................................................................20
Possible calamities until 2020.......................................................................................21
Opportunities ..............................................................................................................23
Probability of natural disasters in the EU...................................................................24
Probability of intentional disasters in the EU..............................................................28
Probability of collapse of soya imports due to societal causes in the EU.....................31
Probability of the collapse of soya imports due to external causes..............................31
Historical examples......................................................................................................34

5. Five cases of calamities and their consequences 37
..............................
Case 1: Prolonged and widespread drought...................................................................37
Case 2: Severe volcanic eruption..................................................................................41
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Case 3: Collapse of soya imports..................................................................................43
Case 4: Drought + collapse of soya imports..................................................................45
Case 5: Large-scale animal disease epidemics...............................................................47

6. The market mechanism, market failures and reasons for
intervention 53
.........................................................................................................
Self-regulating capacity of the market...........................................................................53
Limits to the self-regulating capacity of the market.......................................................54
Emergence of state-owned companies...........................................................................57
EU Agricultural Policy.................................................................................................61

7. Options for reducing vulnerabilities 63
......................................................
Preventive options for a collapse of soya imports..........................................................63
Option 1. Conclude trade agreements...................................................................63
Option 2. Risk diversification in the soya supply....................................................63
Option 3. Acquisition of farmland overseas...........................................................64
Option 4. Promote production of other protein crops............................................65
Option 5. Promoting the production of energy/protein crops.................................69
Option 6. Selectively restore the use of meat-and-bone meal in animal feed..........72
Option 7. Discourage meat consumption...............................................................74
Preventive options regarding crop failures in the EU.....................................................75
Option 1. Further integration in the world market.................................................76
Option 2. Intensify the policy to prevent the introduction of plant diseases............77
Preparedness and response to feed scarcity...................................................................77
Precautionary measures for the first year of scarcity...................................................77
Option 1. Improve resilience of agronomic production..........................................78
Option 2. Improve the resilience of animal production..........................................79
Option 3. Restrict grain exports and/or promote imports.......................................82
Option 4. Promote imports of dairy products and meat.........................................83
Option 5. Permit mowing or grazing in nature reserves........................................85
Option 6. Create emergency stockpiles of feed and meat.......................................85
Option 7. Make the private sector co-responsible..................................................87
Option 8. Contribute to private financial buffers...................................................88
Option 9. Distribution of feed and food.................................................................89
Precautionary measures for the second year of feed scarcity.........................................91
Option 1. Land set-aside.......................................................................................91
Option 2. Extensification.......................................................................................92
Option 3. Variable levy on fertiliser......................................................................92
Option 4. Establish emergency stocks for the means of production........................92
Recovery ..............................................................................................................93
Precautions regarding animal diseases..........................................................................93
Prevention ..............................................................................................................94
Option 1. Expanding veterinary policy with policy to counter bioterrorism...........94
Option 2. Regulate the density of livestock clusters...............................................94
Option 3. Reduce long-distance animal transports................................................94
Option 4. Enhance the specific and general resistance of livestock to infection.....95
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Preparedness and response……………………………………………….....................97
Option 1. Emergency stocks of vaccines and basic capacity for culling.................97
Option 2. Prescribed buffer capacity on livestock farms and at slaughterhouses
and rendering plants..............................................................................97
Option 3. Establish emergency stocks of meat.......................................................98
Option 4. Allow more imports of meat and dairy products.....................................98
Recovery ..............................................................................................................98
Are the means and aims in proportion?.........................................................................99

8. Shifting the burden to developing countries, and options to
limit this tendency 101
.........................................................................................
Prevention ............................................................................................................103
Option 1. Investments in agriculture....................................................................103
Option 2. The right to protect agriculture against rapid growth of imports..........107
Option 3. Code of conduct for biofuels................................................................108
Option 4. Code of conduct for land grabbing......................................................108
Preparedness and response..........................................................................................108
Option 1. Trade regulations that are more resilient to scarcity............................109
Option 2. Coordination of emergency stocks.......................................................110
Option 3. Emergency financing...........................................................................111
Option 4. Make the private sector co-responsible................................................111
Option 5. Anti-cartel policy.................................................................................111
Option 6. Regulate speculation............................................................................115
Option 7. Strengthen the resilience of developing countries.................................116

9. Conclusions 117
.......................................................................................................
General conclusions....................................................................................................117
Specific conclusions...................................................................................................118

B. Advice to the Dutch Minister for Agriculture and Foreign
Trade 125
....................................................................................................................

Appendix 1: Abbreviations used.............................................................................137

Appendix 2: Participants in preliminary sessions..................................................139

Appendix 3: Mandate and composition of the Platform Agriculture, Innovation
and Society.........................................................................................141

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List of text boxes

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Box 1.1 Energy crisis, food crisis and financial crisis
Box 1.2 Similarities between the food crises of 2007/08 and 1972/74

Box 2.1 Maritime geopolitics in the 21st century

Box 3.1 Background reports*

Box 4.1 Corporate governance and the food chain in the Netherlands
Box 4.2 Cyberwars
Box 4.3 The 10 most severe volcanic eruptions of the past millennium
Box 4.4 What is a relevant probability of a calamity?
Box 4.5 Worldwide effects of the most severe volcanic eruption in the past millennium:
Tambora in 1815
Box 4.6 Could the Netherlands feed itself if imports of food and feed were to stop?

Box 5.1 The indicative model used and several of its limitations

Box 6.1 Lessons from the financial crisis
Box 6.2 Government interventions in Dutch agriculture and food security during
Box 6.3 EU Agricultural Policy

Box 7.1 Debate on sustainable soya production in South America
Box 7.2 How the EU traded away the production of oil seeds
Box 7.3 Autarky, integration in the world market or a third way?
Box 7.4 Energy crops and the environment
Box 7.5 Wheat yeast concentrate and DDGS as new protein sources
Box 7.6 Flexible blending obligation for biofuels
Box 7.7 What percentage of soya imports can be replaced by meat-and-bone meal?
Box 7.8 How quickly could the "autonomous" productivity increase in agriculture replace
soya imports?
Box 7.9 Proposals of the European Commission for EU agricultural policy reform
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Box 7.10 Intentions of the European Commission regarding price rises and price volatility
Box 7.11 Is meat production in Brazil less sustainable than in the EU?
Box 7.12 Effects of calamities on sustainability

Box 8.1 Land grabbing: risks and opportunities
Box 8.2 Agricultural neglect in Africa
Box 8.3 Effects of the credit conditions of the IMF and World Bank on rice production
and food security in Ghana, Honduras and Indonesia
Box 8.4 Speculation: curse, blessing or both?
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The vulnerability of the
European agriculture and food system for
calamities and geopolitics
A stress test

A. Report

drs. Wouter van der Weijden
Chair, Platform Agriculture, Innovation and Society

in cooperation with

Dr Kees Burger, Development Economics (Wageningen UR)
Dr Don Jansen, Plant Research International (Wageningen UR)
Dr Carin Rougoor, executive secretary Platform Agriculture, Innovation and
Society
Dr Eric Hees, CLM Research and Consultancy

Platform Agriculture, Innovation and Society
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