The Implications of the European Green Pact for Latin America
The European Green Pact was launched in December 2019, with the EU’s ambition to become the first climate-neutral continent by 2050. The plan is based on seven pillars, each with a distinct strategy for implementation: clean energy, sustainable industry with an emphasis on a circular economy, rebuilding and renovation of facilities, sustainable mobility, biodiversity, "farm-to-fork," and pollution eradication. The entire strategy rests on a number of goals and commitments, including budgets for 1 billion euros, to support the transition to sustainability over the next decade.
The Farm-to-Fork (F2F) strategy was issued in May 2020 along with the Biodiversity Strategy on Horizon 2030, already incorporating the COVID-19 scenario. The EU will allocate as much as 40 percent of the Common Agricultural Policy (CAP) funds for F2F shares, by linking food with the health of individuals, societies and the planet. Therefore, there are clear goals set out for reducing the use of pesticides and antibiotics, boosting sustainable agriculture, promoting the consumption of plant-based protein, and making each of the elements of the chain more sustainable. Considering that not all the links in these chains are within the EU, the strategy notes that it will promote “Green Alliances” through technical cooperation and its trade policy, in an effort to stimulate a global transition. This has important implications for Latin American agribusinesses.
Mandatory and binding aspects—such as maximum pesticide residue limits—will place a heavier demand on producers, with a number of nitrogenous and phosphoric agrochemicals, as well as antibiotics traditionally used to ensure plant and animal health, being banned, while maintaining their productivity. As there is no immediate replacement for these inputs, sectoral representatives—both EU and abroad—indicate that their profitability and market access will be seriously affected. The EU will rely on significant elements of research, development and technological transfer to facilitate the transit into sustainable production models.
Without a doubt, Latin American producers require technical and financial support to ease into the same process. Consider, for example, that almost a third of South America’s arable land is covered by soybeans, which uses agrochemicals currently frowned upon by the EU. Such is also the case for many other agricultural and livestock fields, in which crop protection will be encouraged through integrated pest management, targeting biological control and other practices. To monitor the reduction in pesticide use, a harmonized risk assessment has been put in place, after five years assessing the change in the EU.
Other key aspects have to do with a shift in practice and technology, in order to reduce the contribution of agri-food chains in greenhouse gases and deforestation from the productive base, including imports. Proposals focus on incentivizing models revolving around regenerative agriculture, circular economy and bioeconomy. For its part, the commission in charge of the F2F strategy will develop a Code of Conduct for Business Practices and Marketing, which includes a permanent monitoring system.
As has been seen more clearly during the pandemic, Latin America is still lagging behind significantly in its comprehensive healthcare systems, quality and safety management and adequate marketing of its food, with behaviors varying between countries. Sanitary surveillance and monitoring systems for exports have improved in countries with a significant export basket, even though their domestic counterparts have been neglected, which means that adapting to higher standards to comply with international regulations forces countries to harmonize their own standards and systems, benefiting their own people in the long run.
Much of EU-LAC cooperation resources, as well as those of national governments, should be applied to strengthening so-called “quality infrastructure” (metrology, standardization, accreditation and conformity assessment). Similarly, private sector capacity building is needed, both for the above aspects and to enable a decisive transition towards more sustainable production models.
In terms of nutrition and health, the strategy notes that half of the European population is overweight, with 16 percent reaching obesity levels—a risk factor for COVID—and thus, it is important to encourage healthy diets, making these the most accessible and appealing alternatives. This is certainly an opportunity for Latin America’s “superfoods”, which have already shown a significant uptick in consumption during the pandemic, and come in many cases from organic production models or other sustainability approaches, including various fruit trees that the EU imports in large volumes. Lastly, the digitalization of the productive sectors in this context appears to be one of the most pressing matters for Latin America in both the field of public and private support, since systems such as Blockchain, among others that CAF has been encouraging, are expected to facilitate traceability of agri-food chains and their consequent market access.
