EU grains to drop 8% due to CAP reform anxieties, says Copa-Cogeca
The 2015 EU cereals harvest could drop to 293.9m tonnes - 8% lower than last year, according to figures from European farmer and agri cooperative Copa-Cogeca. Cereal production areas will also be 4% down.
Speaking to Milling & Grains, commodities and trade director at Copa-Cogeca Arnaud Petit said it was a significant drop due to two factors – last year was a record harvest and farmers were reacting to CAP reform regulations.
Under the reform, farmers must set aside 5% of their land as ‘ecological focus areas’, meaning they cannot plant on this area.
“Farmers don’t want to be analyzed, so they are trying to apply in a secure manner and many went beyond the 5% which explains the harvest impact,” he said.
Many farmers, he added, were also still waiting on calculations to work out what arable land was eligible for these new eco-areas.
E-15 area hit hardest
Petit said the EU-15 area – Austria, Belgium, Denmark, Finland, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal, Spain, Sweden and the UK – had been most affected by over-cautious farmer actions.
“This is where you’ve seen the strongest decrease, most probably because not all land is eligible,” he said.
In addition, farmers were tackling high prices on fertilizers which also played a role on the decrease, said Petit.
“[Farmers] are anxious about the market because it is still uncertain – there is a huge carryover of grains around the world and furthermore the price of fertilizers is still very high. I cannot say they’re positive.”
Will it impact manufacturers?
Asked if the cereal harvest dip would hit the wider market and manufacturers, he said it was unlikely to cause too much disruption.
“Europe is really open in terms of markets – we are big exporters on grains and cereals but we also import. Last year, due to bad weather, we had a lack of rich protein wheat so we imported. So, it doesn’t mean the operators will be hit with less because we’re really connected with the world market.”