Corona crisis – Agricultural trade at its limits

UFOP: Rethinking regionalism - securing raw materials starts in the field

Berlin, 07 April 2020. The issue of secure market supply is currently a topic of direct concern to consumers. The occasional sight of empty shelves is unfamiliar; hoarding is proof of just how quickly households in an affluent society focus on securing their own needs. The Union for the Promotion of Oil and Protein Plants (UFOP), the German Oilseed Producer Association, sees this as proof that international agricultural trade reaches its limit in crisis situations. It demands that, when implementing the "Farm-to-Fork" strategy as part of the EU Commission's Green Deal, politicians should once again focus on regional raw material production for food supply instead of offering it as compensation in free trade agreements.

For shelves to be full, well-functioning supply chains are needed that start with cultivation in the field. These supply chains are virtually invisible to the public. Weak points in the security of supply consist in different transport systems in goods collection, storage and delivery in ports or to processing companies. Currently, requirements to combat the corona crisis are being added. In a nutshell, the formula is: the shorter the supply chain, the more secure it is. In North America and the European Union, agricultural goods are transported by rail and heavy goods vehicles; in South America, this is done almost exclusively by heavy goods vehicles. Soybeans are transported over long distances to oil mills and ports. In the case of Argentina, in addition, the government has recently increased export duties on soybean meal, so that the export of soybean meal has virtually come to a standstill and oil mills have had to close.

The current crisis should therefore be taken as an opportunity to rethink regional origins and short supply chains, stresses UFOP, referring to the "farm-to-fork" strategy announced by the EU Commission. At the same time, this is associated with more transparency, as consumers increasingly want to be informed about where food comes from and what it is produced with. This increased sensitivity must be used to strengthen regional ties and improve consumer information, the association suggests. On many dairy products, this could be recognized by the label "without genetic engineering". The animals would be fed GMO-free rapeseed meal. According to the UFOP, the rapeseed could come from German or European cultivation.

UFOP emphasises that the strategic orientation of securing raw materials starts with the area under cultivation. German and European oil mills will be affected if full capacity utilisation is the goal. German oil mills alone grind about 9 million tons of rape seed. Appropriate producer prices, addressed to farmers in good time before sowing, are the decisive signal to give the necessary impetus to the cultivation of rapeseed and to fill the warehouses with rapeseed grown in Europe.