World Markets Current Competitive Position and Perspectives Report - - PowerPoint PPT Presentation

EESC – Farmers’ Category Meeting Brussels. 27 January 2015 1 27/01/2015

EU Member States in Agri-food World Markets

Current Competitive Position and Perspectives

Report for the Policy Department B Structural and Cohesion Policies – European Parliament

José María García Álvarez-Coque Universitat Politècnica de València

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Stru Structure of the P cture of the Presen resentation tation

• 1. Bakground
• 2. Trade Performance
• 3. Prospective survey
• 4. Competitiveness factors
• 5. Case studies
• 6. Conclusions and recommendatios

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• 1. B
• 1. Back

ackgroun ground

The EU, a leading agri-food actor:

• 87% exports are added value products.
• But elements of fragility persist.

A group of experts

• JM. Garcia, M. Petit, Z. Kristová, T. Heckelei, K. Arovuori, P. Pyykkönen, Fabian

Capitanio, Raúl Compés-López, Victor Martínez-Gómez.

• Examined the EU competitiveness in world markets.
• Assessed the scope and influence of policies.

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Competitiveness refers to “ability of firms or nations to offer quality

products at competitive prices and to provide adequate returns on the resources employed”

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• Quality

Non Cost/Price Competitiveness Cost/Price Competitivenes s

• Export

performance view (Zero-sum game) Short-term approach Productivity view (Positive-sum game) Long-term approach

• Brand

Technology

Scale Proximity Origin Tradition RDi Specialisation Capital Integration/ Consolidation Trade

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Method Methods

• Standard indicators of trade performance
• A prospective online survey targeting a large group of

stakeholders and complemented with in-depth interviews.

• 158 respondents
• 19 Member States
• Research (34 %), farming organisations (28 %),

public officers (18 %) processors (15 %), inter- professional organisations (5 %), retailers (4 %) and wholesalers (4 %).

• Case studies following a food chain approach

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Export market share (EMS) and Net Export Indicator (NEI)

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• Source: Comext, WITS, authors
• 2. T
• 2. Trade

ade perf perfor

• rmance

mance

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A quite diverse picture in the EU-28. Since 2002….

• Better performance in Baltic States, Luxembourg,

Poland, Portugal and Romania.

• Greatest declines in Denmark, Hungary and Slovenia.

Sector performance:

• Better performance in meat (pork), fruit and

vegetables, cereals.

• Less optimistic in milling industry, oilseeds, sugar and

fats and oils.

• In milk and dairy, competitiveness of the EU-28 has

been deteriorating over time.

• EU: world’s leader in drinks. Wine exports recovering.

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• 3. Pros
• 3. Prospec

pective surve tive survey

Optimistic views………

• Quality and growth potential of the EU agri-food

economy. Less optimistic views…

• Weak ability of the EU agri-food sector to increase

employment.

• Trade balance will be negative in significant sectors.
• Foreign demand is only part of the solution.

Performance is expected to improve in

• Sectors that have been most affected by the crisis.
• Export-oriented Mediterranean sectors
• Grain exports.

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• 4. C
• 4. Competitiven
• mpetitiveness

ess fa factors ctors

Agricultural productivity gap

• Weak farm structures
• Limited scope for crop yield increase

Coordination in the value chain

• Producer Organisations’ limited negotiating power.
• Need for strengthening management capacities in POs.
• Possible conflict between competition rules and POs

Innovation

• Recent EU policy focus on the innovation potential of the

agri-food sector.

• Faster knowledge exchange is needed.

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Labour productivity gap between the US and the EU-15

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• Source: KLEMS Database, 2014

Cereal yields in 2012

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• Source: FAOSTAT

Annual Agricultural Total Factor Productivity growth (%)

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Source: USDA (2014)

Agricultural RD expenditure (EUR million)

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Source: OECD (2014), Eurostat (2014)

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• 5. C
• 5. Case

ase s studies tudies

Competitiveness issues

• Cereals: rising demand and price volatility
• Dairy products: increasing demand and market power.
• Beef: low profitability, Mercosur challenge
• Fruit and vegetables: market power, operational

programmes, crises prevention.

• Olive oil: demand in no traditional markets, standard

harmonisation.

• Wine: Competition between “old” and “new” worlds,

regulatory burden.

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Th The e role of policies role of policies

Pilar I

• Impact of direct payments on productivity is ambiguous.

Pilar II

• Great potential to promote sustainability,

competitiveness and innovation.

• 2014-2020 budget raises concerns on policy effectiveness.

Trade policies

• Significant impact on chain performance.
• Bilateral agreements, a practical road-map.
• Risk that the TTIP will shift standards towards the ‘least

common denominator’. Sustainability and climate challenges

• raise innovation opportunities rather than threats.

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• 6. C
• 6. Conc
• nclusions a

lusions and reco nd recommend mmendations ations

• Fair performance but not balanced within the EU. A

challenge for the single market.

• Need for effective and non-burdensome regulations.
• Social, territorial cohesion and sustainability should

contribute to agri-food competitiveness.

• Attention to domestic market!
• Trade policy, a strategy to level the playing field in the

world setting.

• Keep EU leadership in WTO: TRIP.
• Pillar II, lost opportunity?
• New R&D&I partnerships open opportunities for public

and private stakeholders.

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EESC – Farmers’ Category Meeting Brussels. 27 January 2015 18 27/01/2015

EU Member States in Agri-food World Markets

Current Competitive Position and Perspectives José María García Álvarez-Coque Universitat Politècnica de València