Pekka Pesonen has been the Secretary General of Copa and Cogeca for almost 14 years. Copa and Cogeca is the main representative body for agriculture and fisheries in the EU with members comprising more than 70 farmer and agri-cooperative organisations. Pesonen previously served as State Secretary for the Ministry of Agriculture and Forestry in Finland. He holds an MSc in agriculture and has gained professional experience in the EU and in the food industry in Finland.
Copa and Cogeca represents 40,000 farmers’ cooperatives and 660,000 people employed in farming. Which main problems does the Covid-19 pandemic present for this important industry?
Pesonen: The crisis is a test for food security. Europe’s farming sector is presented with secondary difficulties. With restrictions to movement, also for goods, the agricultural sector is experiencing bottlenecks and demand is shifting. We are working hard to make sure we can provide food for society in the long run.
In what way is demand and consumption shifting?
Pesonen: Consumption is shifting away from high-value expensive food to cheaper low-quality food. The situation is very strange. I saw it through the food cooperatives and retailers. Here in Brussels the campaign was still on for fresh salmon, whereas people are buying cheap staple food.
With demand shifting to cheaper food, is this not a serious problem the organic sector?
Pesonen: The organic sector will more or less remain with no difference. Organics is a niche market and the bigger it becomes the more exposed it will become to risk. If the organic sector is to have a 30% market share as the EU Commission has proposed, it has to perform much more efficiently. Consumers are not stupid. They always go for the price. Prices are too expensive. Organic products cost 4-5 times as much as conventional foods. A few weeks ago, an EU politician approached me asking if I can support 20%. But it is about performance.
Is panic buying a big issue in terms of supply?
Pesonen: In foodstuff we don’t have hoarding in classical terms. But if every consumer buys 15%-20% more, there is this strange experience of primitive reaction. Toilet paper is the best example. A shelf full of soft tissue plays an important role. However, a truck full of pasta is a lot heavier than light inexpensive tissue paper. We have switched to just-in-time-deliveries in the past 20-30 years. For the Finnish Dairy industry planning was entirely different in the early 1990’s. Now the industrial processes are cheaper. It is normal to keep stocks on rolling wheels. There is no investment in warehousing.
Is there a problem with Europe’s supply chains?
Pesonen: There are different reactions from drivers. Logistics companies cannot send their drivers to the other end of Europe because of the different quarantine measures in place. Even if one country right in the middle of Europe closes its borders, this presents a great problem. Companies have no guarantee that they will be able to deliver. In Hungary, it is not possible for drivers to enter the country. So, what are they supposed to do with their trucks? Problem is that the drivers will refuse to go. This is a serious disruption and a big issue with food.
In addition, there are risks to the feed sector, which is heavily reliant on additives and on China. This may have an impact on animal health. In a recent meeting we have stressed how important it is to maintain internal and external trade. Trade needs to remain as intact as possible.
In the joint statement “Ensuring food security is our main primary objective” issued on 19 March you call for the EU Commission to monitor raw material prices. Have you witnessed a drastic shift in raw material prices?
Pesonen: Normal market fluctuations in price have happened. There have also been some increases in price where there are limited supplies, but this is not a major trend.
In your view, how will the Covid-19 crisis impact the raw material prices in the long run?
Pesonen: This is a bit early to say. Much depends on how we organise our value chains. We are overly dependent on China and China restricts trade. Containers have been blocked and this is a major bottleneck. We need to consider how we can increase our resilience and how trading with China can become safer. We need to build on pharmaceuticals - not only for animal health reasons but also to avoid shortages for human healthcare.
Copa and Cogeca is particularly concerned with the problems the fruit and vegetable growers are confronted with. Why are these growers so vulnerable to the crisis?
Pesonen: Consumer demand has changed dramatically. Take the asparagus producers for example. With the collapse of the hotel and catering sector their planning has been thrown out of the window. In addition, they still have large supplies from last year. The shortage of labour in the fields is of course another problem. We have made a statement quite early demanding access to constant labour in all major producing countries. Specific measures are required as consumption is shifting from high-value to low quality. Coupled with the short keep of fresh products this is the perfect mix for disaster. Confagricoltura, Italy’s biggest farming association, has also highlighted that seasonality is a big problem.
The shortage of labourers is a pressing issue. Is it not rather the member states that should resolve this issue rather than the EU?
Pesonen: Yes, that’s right. The member states have the competence, but the EU Commission has published guidelines for the labour section, which is a good initiative on what would be the best way in balancing between public health concerns and disruptions to the labour market. Agriculture needs provisions for movement across borders and regions.
Does the Covid-19 pandemic perhaps also represent a chance?
Pesonen: People need to understand that agriculture is very much linked to food security That’s why we are fighting like hell to make it work. We need to make sure that criticism is not going to happen. Environmental sustainability is an issue. Reflection must take place on how we can meet the high-profile political objectives. For the food industry we need to take a look into how we organise ourselves, husbandry and industrial farming. We are very much susceptible to Chinese hygiene rules and very much depend on China for equipment. We need to be prudent.
Are environmental issues not a risk of being overshadowed by the current crisis?
Pesonen: No, I don’t expect that the Green Deal proposal will be abolished. But fine-tuning is taking place. A few weeks ago, we were still talking about farmers’ protests and reducing pesticides. Consumers are acting in a way they would in a crisis situation – primitive. They do not care. The farmers are very concerned over health issues. They and their families are very much exposed to pesticides such a glyphosate. We need to be prudent on how we use chemicals and pesticides. The farmers need training, it is important for the farmers themselves. Politicians refuse to consider food security. For them agriculture has nothing to do with food security. My gut feeling is that several member states would like to see a “handbrake” for supply. The sustainability discussion will continue.
This sounds like hypocrisy, can you explain?
Pesonen: Frans Timmermans asked us if we can commit ourselves to a 30% reduction of pesticides. Our answer is: can you give us the alternatives? The EU Commission cannot do this. We are urging them not to underestimate food security. The farmers need alternatives and the member states require the ability to impose change, but there are concerns in food security. And no illusions, organics also uses chemicals. Denmark went totally mad with sulphur dichloride. The same politicians and NGOs supporting a cut to pesticides turn a blind eye on this. If organics are to grow, they need new breeding technics and GMO. And if we support a 30% market share for organics, does this mean we will close the EU external borders for all non-organic imports?
Is there an aspect we have failed to mention so far?
Pesonen: The single market is an important element we haven’t talked about. We see the value of the single market. If we lose the single market, we will lose measures to sustain agriculture.