The rise in bread price affected all families but one must understand that this rise is not based on local factors only but on a global growing problem of wheat production. Various factors that occurred in the last years around the globe are leaving their impact; this is leading to a price increase in products such as wheat.
Traditionally wheat exporter countries, such as India, are facing drastic problems. The subcontinent last year changed its status from a major exporter to an importer. While back in 2003 the Asian country exported up to nearly six million tonnes this year had to import nearly the same amount.
Other countries such as Russia and Australia will be cutting down their export output. Australia, listed third biggest wheat exporter, had to reconsider its estimate for exports with the result that the output might be 18 per cent less that the amount predicted.
Demand for crops is rising for a range of reasons. The most understandable is simply the world’s fast-growing population, which will reach approximately seven billion people by 2010, nearly three times the 2.5 billion that lived on earth in 1950.
This unstoppable trend derives itself by the rising living standards, especially in China and India. Higher incomes are leading populations to consume more meat. More meat consumption requires a lot more grain to keep up the supply. It takes 7kg of feedstock to produce 1kg of beef. This is the type of problem we are facing in Malta.
With three billion new consumers starting to follow Western lifestyles, it is not surprising that in six of the past seven years consumption of grains has passed production stocks.
If the demand side looks stretched out, the supply picture is not much brighter. According to Diapason, most good-quality agricultural land is already in production. What is worse, more than a quarter of it has been seriously damaged by the exhaustive agriculture practiced since the Second World War.
The high demand for agricultural products is not giving enough time for humus, the fertile part of soil, to regenerate. This may lead to a decrease of nearly 30 per cent of usable soil within 15 years. As a result between 1970 and 2000 the world’s deserts expanded by 160m hectares – an area about equal in size to seven Great Britains.
The low harvest around the world, the bad weather in Europe and the growing demand from East Asia have led to an increase in demand for grains. The European Commission and the European Council are studying the situation to try to find a solution for this phenomenon.
During the Agriculture and Fisheries council meeting held in Brussels on 16 July, the Swedish delegation, supported by Germany, France, Austria, Denmark, Luxemburg, Malta, Belgium and Estonia requested that the set-aside level (currently 10 per cent) be set at zero per cent for the 2008/2009 marketing year. This would enable the increased demand for cereals and oilseeds on the Community and world markets to be met.
Commissioner for Agriculture Marianne Fischer Boel also supported this initiative. She declared on her website that the entire principle of set-aside would also be high on the agenda of the Common Agricultural Policy (CAP) Health Check. The Commission announced that it accepted the principle of a zero per cent set-aside level for the 2008/2009 marketing year one and would submit a proposal to that effect as soon as possible.
In the last decade we have had, the European Union reformed agricultural policy. The new, reformed CAP has clearly taken in consideration the studies carried out among consumers and taxpayers from all over the member states. The new reformed policy ensures that the 27 member states have a firm basis for preserving the rural heritage, produce the agricultural goods demanded whilst at the same time ensure competitiveness in the global marketplace.
The European Union’s particular model of agriculture responds to the requirements of civil society. It focuses on the high expectations on food production, food safety, environmental standards, agricultural trade and value for money. The CAP is the vehicle that delivers this. It has been a long march from support for over-production to a market-oriented, environmentally friendly system. Nevertheless, this ‘green evolution’ will continue.
CAP and other EU policies have led to the creation of a large single market in agricultural goods in the EU and have helped the EU to become a major world player in agriculture and food terms.
European agriculture is a major player in the world’s agricultural markets. The ability of EU agriculture to produce large quantities of agricultural products, and the diversity and quality of those products, means that the EU has become a major exporter globally with agricultural exports worth EUR61.088 billion in 2002. Empowering sustainability in the agricultural sector will transform it a major economic contributor.
David Casa is a Nationalist MEP
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www.davidcasa.eu