Oireachtas Joint and Select Committees

Wednesday, 13 July 2022

Joint Oireachtas Committee on European Union Affairs

Food Security in the European Union: European Commission for Agriculture and Rural Development

Mr. Michael Scannell:

I will start with the fertiliser issue. Nobody would question that we are hugely dependent on imports, but we have to make a distinction between the different components. For example, in terms of potash we were traditionally reliant on major imports from Belarus and even before the war in Ukraine we had taken sanctions against Belarus. Now we have to turn to alternative sources on world markets for potash. Unfortunately, very few are in Europe. Canada and Morocco are major producers of potash and phosphate. China is also a large producer, although it has restricted exports and given priority to domestic consumers.

Nonetheless, in terms of potash and phosphate, we need to take account of what I mentioned earlier. Farmers can, in the short term at least, ease off on their use. We have been able to cope pretty well. The European fertiliser industry comprises major traders and is very good at sourcing products on global markets and selling them on global markets, including in Europe. There has been no supply crash in Europe.

We are more concerned about nitrogen-based fertilisers. We are very reliant on imports of Russian gas in that regard. For nitrogen-based fertilisers we can do one of two things, that is, import fertilisers or produce them in Europe. By and large, they have been produced in Europe, but that means importing gas. That is what we have been doing. A lot of that gas, as I acknowledged and we all know, comes from Russia. The signs have been ominous in regard to Russia deciding to curtail supplies, such as recent maintenance issues on Nord Stream I and the formal cut-off of gas to Poland and Bulgaria. It would be imprudent not to plan for a situation where gas supplies would become even more precarious. I am repeating myself, but that explains why we have communication coming forward next week on how we work with member states to anticipate potential shortages to the end of this year. As I mentioned earlier, this needs to be prominent on our radar screens, and indeed it is.

Turning to the humanitarian dimension, my expertise is in agriculture, CAP, supporting European farmers, etc. The humanitarian aspect is important, but we have other specialist services that work in that field. Food is obviously extremely important in this context. I acknowledge our communication on food security, which very transparently highlights that there are major challenges at the global level, including in the humanitarian area which explains why, to repeat myself, there is €1 billion for the Sahel and Lake Chad area and €600 million for the Horn of Africa.

Is that enough? Frankly, I have to turn to the development community on that and the ongoing debate on the extent to which Europe and other international donors can, should and do work with the Food and Agriculture Organization of the United Nations, FAO, WFP and other UN agencies, to not just provide humanitarian aid as a kind of short-term fix for clear shortages in the market of foodstuffs. We are not dealing with a potential risk to food security in some of these countries; it is actually happening. There are lots of figures available on the number of people in precarious food security situations, which has increased sharply in recent months and years.

I return to Deputy Calleary's question on inflationary impacts. In Europe, we spend a relatively small share of our overall household expenditure on food, with important distinctions between high, low and middle-income earners. On average, it is relatively low. In developing countries, the figure is relatively high, at 50% or more. Anything that leads to an increase in food prices in these countries squeezes incomes and leaves a lot of citizens in these countries in a situation whereby they do not have money to buy food. As I said, the FAO has produced a lot of figures that are very worrying in that context.

The international community is working hard. I mentioned the Lugano conference on Ukraine that took place last week. The UN General Assembly, FAO and WFP are all preoccupied with how we deal with this issue, with the added complication that we saw a sharp increase in commodity prices even before the war in Ukraine. As to solutions, perhaps the committee could invite one of my colleagues from our international services to come back to it at some future date. That merits a long discussion in itself. I am sorry if I am not able to give the Deputy the answer he hoped or expected. I ask him to keep in mind my limitations in this area.

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