After over a year of soaring energy and food prices fueled by the post-Covid rebound and war in Ukraine, eurozone inflation relented modestly in November from 10.6% to 10%, marking the first dip since June 2021. But despite this apparent sign of hope, European Central Bank President Christine Lagarde has warned that the bloc is not yet out of the woods.
Addressing the European Parliament on 28 November, Lagarde stated that she does not “believe that we’ve reached peak inflation” or “that it’s going to decline in short order.” This pessimistic assessment is particularly concerning for the EU’s local agricultural producers, such as Greek cheesemakers on the island of Naxos, who have been brought to the cliff edge by skyrocketing production costs.
Given the current reality for its farmers, the EU must ensure that its agri-food policies, including its impending proposal for a bloc-wide healthy food label, does not needlessly compound their financial woes.
Backs against the wall
The dire inflation challenges facing Greek dairy farmers, namely sharp price increases for key inputs like animal feed and fuel, reflect the broader issues in Europe. Disruption in the supply of Russian natural gas is set to keep energy prices high during the looming winter, while continued uncertainty with Ukrainian and Russian agricultural exports used for feed will add further pressures. Beyond insufficient feed supply and rising input costs, dairy farmers are also looking at a potential drop in consumer demand in 2023 as a result of food inflation.
But they are far from the only ones under the gun. Olive oil producers in Europe have been devastated by rising production costs as well as the record droughts of last summer, with producers in Italy and Spain expecting a 30% dip in output and Portugal a possible 40% while EU production as a whole is set to plummet by 25%. What’s more, climate change-driven extreme weather over the summer scorched grazing fields, leaving livestock farmers in an even more vulnerable position.
According to agri-food associations COPA-COGECA, the Primary Food Processors and FoodDrink Europe, this toxic combination of threats is forcing an increasing number of producers to halt operations or permanently close. In countries including France, Romania and Poland, farmers have even turned to alternative income sources, such as agro-tourism and solar energy production, to counter the financial shock of inflation and harsh weather conditions.
High stakes food label debate
The significant pressures already felt by EU farmers of traditional products risk being exacerbated by the outcome of the contentious Front-of-Package (FOP) food labelling debate heating up in Brussels ahead of the Commission’s anticipated proposal for a bloc-wide label in 2023 aimed at improving dietary health.
In the latest event building up to this decision, the European Parliament hosted a roundtable on 30 November, which brought together MEPs, nutritionists, local agri-food producers, trade association representatives and regional politicians from across the bloc to discuss the merits and pitfalls of FOPs. While a consensus emerged on the public health necessity for FOP systems, many concerns targeted one of the candidates, Nutri-Score, which uses a colour-letter grading system to evaluate product healthiness.
Crucially, the debate provided a strong platform for the often-overlooked regional perspective. Local cheese producers from Greece and France cited Nutri-Score’s failure to factor in the broader macronutritional benefits of their products – which receive misleadingly negative grades that harm their competitiveness – while regional politicians highlighted the cultural and health value of traditional food products. Furthermore, expert nutritionists including Daniela Martini and Frédéric Leroy stressed the importance of balance and moderation in healthy diets, which the Mediterranean diet that these producers represent provides. More broadly, participants agreed that rather than influencing, FOP labels must focus on educating and empowering consumers.
These kinds of arguments have made an impact in Brussels, with opposition to Nutri-Score mounting in recent weeks, including from a group of 24 MEPs and First Vice President of the Commission Frans Timmermans, who has questioned why “a processed product can have a better Nutri-Score than a natural product,” adding that he “wants to be sure, when we present a proposal, that it can be accepted by the entire chain of production.”
Looming obesity epidemic
Beyond the impact on local farmers and dietary traditions, the stakes for next year’s FOP decision are also high in terms of public health, so the Commission needs to get this right.
The World Health Organisation (WHO) has warned that obesity in Europe is reaching “epidemic proportions,” with nearly 60% of adults and almost one-third of children overweight or obese. What’s more, EU countries are at risk of an average rise in obesity of 10% between today and 2030. This situation is truly alarming, given that chronic obesity is one of the top causes of death and disability in Europe, while also increasing the risk of non-communicable diseases (NCDs) such as cancer, cardiovascular diseases and diabetes.
Policies supporting healthy diets, such as FOPs, will naturally be a crucial part of the solution, but given the complexity of obesity, which is itself a disease, wider action is needed to target its “structural drivers.” Among the most impactful solutions, the WHO has proposed that EU countries implement targeted fiscal measures – including healthy food subsidies and sugar taxes – restrictions on unhealthy foods marketing and obesity treatment as part of universal healthcare. Furthermore, anti-obesity action must have a strong focus on inequality, addressing physical and financial barriers in access to healthy foods and physical activity.
With no clear end to sky-high inflation in sight, Europe’s agri-food producers must be protected, particularly the local farmers who offer the continent significant cultural and nutritional value. In the coming year, a major part of this will be the EU’s proposed FOP system, which should avoid patronising people and instead empower them to adopt healthy dietary practices. Given the concurrent obesity and cost-of-living crises, there is little room for error.
Follow EU Today on Social media: