The EU Times

The EU Times

The blog on European Union affairs

The Future of our Food System: A European solution?

One of the recent big implicated headlines, besides corona and the combat of systematic racism, is the meat industry. Europe and the US have faced increased infections in slaughterhouses. In Germany, the undertaking Tönnies was found with 1500 infected workers with Covid-19. The bad working conditions of the workers contributed to a fast spread of the virus at work – but also the living conditions of the workers contribute to that problem. Living closely together on little space, Romanian and Bulgarian workers provide the German slaughter industry with cheap labour. So cheap, that other EU countries’ industries cannot compete fairly.

It is in this time that an old debate gets more public attention: the price of meat. While the Greens in Germany have been scolded for calling for the Veggie Day some years ago, it is now remarkable how also CDU and SPD call for higher meat prices. But higher meat prices themselves can only be the beginning. The system of the meat industry is a complex one which needs change on all possible dimensions. I will briefly give an overview of how our food system is likely to change in the future on different levels. Economic, legal and political aspects combined will matter in this transformation.

First, as already mentioned, the price is discussed. With very low prices for meat from factory farms, consumption is excessive and leads to health and environmental issues, too. With approximately the double amount of recommended meat consumption in Europe, the population not only faces detrimental health and environmental consequences in the future, but will neither tackle the excess by mere higher prices. However, they could influence demand and further curb consumption in the meantime. For instance, national taxes on meat could increase. As the EU has to competences for setting rules on taxes, the tax scheme is only indirectly in the hands of the EU. The good news is: since science is promising that a reduced meat consumption will have multiple benefits, member states with high consumption can unilaterally introduce higher VAT. This will also affect imports from other EU member states and from third countries. Germany could be a forerunner, and not even every member state has to follow suit in the first steps.

Second, what has been discussed in a long while are animal welfare labels. Europeans are widely in favour of proper labelling. However, they differ in their opinion about such labels across the Union. Whether it’s a logo or a text, and whether they actively look for labels can differ from country to country just like consumption differs. This makes it difficult to introduce a common European label given that the impact might not cause serious change everywhere in the same way. Nevertheless, a well-calculated quality corresponding to a union label could raise the lowest national standards both within the EU and from exporting third countries – if consumers are ready to make decisions based on labels, and not merely on prices. Until now, that seems unlikely despite polls saying that welfare matters. The problem is that about 80% of the meat sold is of lower welfare, as German supermarkets are flooded with cheap meat of low quality. The little but expensive choice of meat from high animal welfare makes it unlikely that consumers alone will change the overall demand.

Third, animal welfare itself has to increase by law. For instance, animals could get more space, leading to progressively decreasing numbers of animals in factory farms. A thought experiment could illustrate: if consumption was to be brought to the recommended levels, say 40kg instead of 80kg per year now, than this could lead to a 50% decrease in animal numbers. Giving less numbers of animals more space would drive up the price of farming and therefore the end price for consumers. For the recommended consumption, consumers would in theory pay the double price. Meat would be consumed less, and ideally lead to more awareness for the value of meat. However, it is not easy to achieve higher animal welfare in the EU. While some countries like Germany, the Netherlands or Sweden care about wellbeing of animals, countries like Bulgaria or Estonia care little. Most citizens in general rather consider their own health as a primary reason for less meat consumption or animal welfare. All in all, increasing animal welfare will need different strategies in different member states. However, it is likely that the trend goes this way in the short run. In the long run, it could be feasible to completely get rid of factory farming, which is yet a long way to go.

Fourth, research is looking for meat alternatives. On the one hand, a lot of effort is being made in developing in-vitro meat, which conssits of genuine meat stem cells and is cultivated in a lab. It is much more animal friendly but still expensive to produce. Fun fact: Winston Churchill talked about lab meat already in the 1930s. If technology improves, in-vitro meat could serve as a real option to reduce impacts of factory farming on humans, animals and the environment. Another field of research is insect based food. While in other regions of the world insects are often part of the daily food intake, in Europe they are rare. However, they have a much better protein ratio and require less resources to produces. All it takes to eat more sustainable, in this regard, is the openness of Europeans to try new foods and leave unsustainable diets behind. Last, but not least, major institutions like the Commission, World Economic Forum, FAO and WHO recommend a higher intake of plant based foods. Our diets will contain higher percentages of vegetables. Whether governments openly support it or whether the private economy will regulate itself in this aspect might still be open.

Fifth, supermarkets might not be as free in selling cheap meat in the future as they are now. Their dumping competition forecloses smaller markets and makes entry of small farmers in the industry difficult. With such cheap prices on meat, small producers can hardly compete. Although the big industry is unbundled, meaning that slaughter houses and farmers do not belong to the same undertaking, the value chain does not promote fair competition nor does it produce in the general interest of the Union in the current state. In this system, supermarkets and slaughter houses have too much power in determining prices, while farmers and workers are subject to low benefits. In the future, farmers might have more rights in the meat competition. Regional and local undertakings with small numbers of animals will have better chances to sell meat fairly. As big companies like Tönnies, Vion and Westfleisch in Germany decrease their numbers, small farmers in Germany and neighbour states might see an increase in small and more sustainable businesses. There might even be a stronger competition enforcement by specific regulation for the meat sector safeguarding competition in the interest of environment, animals and small farmers.

Sixth, one other stimulus in the food industry that might disappear is public funding. Especially the Common Agricultural Policy (CAP) of the EU is sending huge direct payments to farmers based on their land size, not how they actually use their land. More specific funding instruments like the fund for rural development could be tied to higher animal welfare standards and avoiding excessive meat production. Instead, funding could promote either free-range farming or vegetables. For instance, these funds could be used to run urban community gardens designed to provide a local supply of vegetables. To take this idea even further, it could be an opportunity to give sentenced people or criminals on trial some community responsiblity by doing work that matters.

Seventh, our future food system inevitably also concerns trade agreements. Most prominently are the failed TTIP agreement and the EU-Mercosur deal that is not passed. So far, it is counter-intuitive that quotas for meet exported from Mercosur to the EU are rising. Deals will also be massively compromised if the EU imports less soy to feed its livestock. In this way, a decreasing European demand for meat will have a positive effect on third countries’ sustainability, hopefully leading to less deforestation of the Amazon basin in Brazil. The EU can hardly make sure that trade rules are complied with in daily transactions in Brazil, but a cut in quotas is easily controllable. Of course, Brazil could just export its meat to China, which is Mercosur’s number one trading partner. In the short run, this might be something that might affect growth negatively. However, this scenario does not imply that cut in meat quotas have to lead to a decrease of competitiveness of the EU. If in-vitro meat develops to an industrial level, it could be an important trade good for the EU.

Our diets will change, and our children and grandchildren will grow up with different eating habits than we did. Also, farmed animals will probably be treated much differently than today. For a sustainable Europe, change is inevitable and meat consumption will decrease massively. The seven points in this article will probably be important issues accompanying this change.

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