UFOP Report on Global Market Supply 2018/2019: Combining Economically Viable Agriculture with Appropriate Agricultural Market and Climate Protection Policies

(Union for the Promotion of Oil and Protein Crops (UFOP)) The Union for the Promotion of Oil and Protein Crops (UFOP) has formulated its policy expectations on the occasion of the presentation of the third edition of the Global Market Supply Report.

The association refers to the generally good global supply situation for the most important agricultural commodities. The caloric needs of the world's population are more than covered in cereals, sugar and oil crops. The updated report also takes into account the raw material requirements for biofuel production and material utilisation as a renewable raw material. UFOP criticises that this supply situation does not play a role in the political assessment of harvest results and calls for maintaining the sales outlook in the fuel markets.

In view of the growing world population, the association emphasises the opportunities of agriculture as a greenhouse gas-optimised "carbon resource" to globally open up new sources of income. Sustainable intensification of agricultural production through the use of technological and scientific progress in the areas of plant breeding and digitisation, as well as the development of innovative cultivation techniques and regionally adapted crop rotation systems can meet the global challenges of securing global food security and coping with the consequences of already noticeable climate change.

The drought-related loss of revenue in the European Union in 2018 was compensated for by global increases in production, but partly also at the cost of unsustainable land use changes in Asia and South America. The report critically points out that flows of goods follow purchasing power. This varies considerably all over the globe and is one of the causes of malnutrition and hunger. In the affected regions, for example in Africa, income development must therefore increase not only in agriculture, but in rural areas as a whole, UFOP underlines. A prerequisite for this is stable government relations.

Against this background, UFOP welcomes the fact that the European Union and the German Federal Ministry for Economic Cooperation and Development (BMZ) have announced that they will focus their future activities on the agriculture and food industry in particular, as key factors in rural Africa.

So far, international politics is failing regarding the "limits" of globalisation and the liberalisation of agricultural trade. From the viewpoint of UFOP, this is one more reason to include the material and energy use of cultivated biomass in a climate protection strategy. In contrast to organic farming, where it is possible to consciously forego yield, raw material reserves, for example from energy use, can be diverted into the food supply at any time. The sustainable intensification of crop production in the framework of the German bioenergy strategy is of particular importance in view of climate change.

Sustainably grown biomass is an important source of raw material for agriculture that generates income for a sustainable energy supply, especially in rural areas, and a raw material source for the material use of renewable raw materials.

The current report makes it clear that this potential is not exhausted. Low prices for cereals, oilseeds, sugar and vegetable oils are the result of global oversupply. At this price level, sustainable economic activity is not possible, even in the rural regions of Africa. In that sense, agriculture lives on economic substance not only in this country, UFOP says.

In the course of the revision of the Renewable Energy Directive (RED II), the European Union failed to properly integrate this potential into climate protection policy. On the contrary: the cultivation of renewable raw materials from cultivated biomass is being gradually put on the shelf, without showing sales prospects in new markets at the same time, UFOP criticised sharply.

Instead, the governments of the world's most important agricultural nations in North and South America and Asia are pushing ahead with the use of energy crops as part of their national agriculture, energy and climate change policies. According to the UFOP report, this is reflected in increasing requirements for the blending of biofuels with fossil fuels. UFOP expects the signatories to the Paris Agreement on Climate Change to recognise and expand this climate protection instrument as part of the national climate and energy plans to be presented by 2020.

UFOP fears that the cultivation of renewable resources will take place outside the EU in future. Consequently, Europe would lose its influence on the previously statutory requirements for the sustainability criteria in third countries. The cultivation of oilseeds in the EU is particularly affected, which is also the most important and GMO-free source of protein for animal nutrition. Conversely, large quantities of soya and thus the corresponding "acreage" are imported. UFOP regrets that this substitution effect is not taken into account in the EU greenhouse gas calculation.

The maxim of agricultural market policy, which was endorsed by the European Agricultural Council at the end of November 2018, is opposed to more environmentally-friendly diversification of crop rotation systems. After all, it is also true for agriculture that those crops are cultivated that promise the highest profit. At the same time, the import dependency of feed protein is increasing. The European Commission's low-ambition protein plan does not change that, according to UFOP.

The European agricultural policy is still obligated to combine the requirements for economically viable and sustainable agriculture with a sustainable agricultural market or climate protection policy and to maintain and further open up sales prospects in the fuel markets. In doing so, ambitious sustainability requirements have to be taken into account, which must also be applied in third countries. Against this background, UFOP eagerly awaits the submission of the German Federal Government's Climate Protection Act with sectoral targets for greenhouse gas reduction and the agricultural strategy announced for autumn 2019. READ MORE