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

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

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 27/01/2015 2

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. 27/01/2015 3

Competitiveness refers to “ ability of firms or nations to offer quality products at competitive prices and to provide adequate returns on the resources employed ” 27/01/2015 4

Export� performance� view Productivity� view � � (Zero-sum� game) (Positive-sum� game) Short-term� approach� Long-term� approach� RDi� � Non� Cost/Price� Cost/Price Competitiveness Competitivenes s Scale� Quality� � � � � Technology� � � Brand� Specialisation� � � � � Origin� Capital� Proximity� Integration/ Trade� Tradition� Consolidation� � 27/01/2015 5

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 27/01/2015 6

2. T 2. Trade ade perf perfor ormance mance Export market share (EMS) and Net Export Indicator (NEI) � Source: Comext, WITS, authors 27/01/2015 7

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. 27/01/2015 8

3. Prospec 3. Pros 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 . 27/01/2015 9

4. C 4. Competitiven ompetitiveness 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. 27/01/2015 10

Labour productivity gap between the US and the EU-15 � Source: KLEMS Database, 2014 27/01/2015 11

Cereal yields in 2012 � Source: FAOSTAT 27/01/2015 12

Annual Agricultural Total Factor Productivity growth (%) Source: USDA (2014) 27/01/2015 13

Agricultural R  D expenditure (EUR million) � Source: OECD (2014), Eurostat (2014) 27/01/2015 14

5. Case 5. C 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. 27/01/2015 15

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 . 27/01/2015 16

6. C 6. Conc onclusions 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. 27/01/2015 17

EU Member States in Agri-food World Markets Current Competitive Position and Perspectives José María García Álvarez-Coque Universitat Politècnica de València EESC – Farmers ’ Category Meeting Brussels. 27 January 2015 27/01/2015 18