Is the EU prepared to guard its meals provide chains?

The EU’s inner market commissioner Thierry Breton performed a tour of Japan and South Korea final week, in a bid to strike up partnerships for the event of a European microchips and semiconductor business. The visits come within the wake of the announcement of the European Chips Act final month, because the bloc makes an attempt to wean itself off dependence on Chinese merchandise for its vital infrastructure. Breton’s move is lengthy overdue, on condition that that the EU has uncared for its provide chain safety for years. Based on 2019 figures, the EU was “strategically dependent on China for 659 of the over 5,600 product categories defined by the United Nation’s Comtrade database”, starting from objects as mundane as cellphones to high-tech merchandise.

Current international bottlenecks and provide shortages for a large number of merchandise within the wake of the Covid-19 lockdowns are driving home how long-lasting the knock-on results of disruptions in China will be – and expose how this over-reliance on Beijing could possibly be exploited by the Chinese authorities for political functions as properly. Breton’s procuring tour for a semiconductor alliance testifies to the rising consciousness in Brussels about this vulnerability and it’s to be counseled. At the identical time, nonetheless, Brussels would do properly to look past the difficulty of its over-reliance in technical sectors to undertake a extra holistic approach that additionally retains a watch on a difficulty that European policymakers contemplate out of date: meals safety.

Corn – a microcosm of Chinese encroachment 

A take a look at the EU’s insurance policies regarding meals safety is sobering: meals safety is handled as a query of meals high quality, designed to make sure that meals consumed within the EU is suitable for eating. What shouldn’t be addressed is the far more elementary process of making certain the supply of meals and feed crops required for agriculture and farming. This was exemplified by a 2020 assertion from Environment Commissioner Virginijus Sinkeviciusthat that “Food security is no longer a major concern for the European Union”. 

With such coverage myopia it’s no shock that Brussels routinely overlooks the actual fact the EU is very weak to Chinese incursion into its major provide of sure crops, by way of its monopolization of Ukrainian corn. Exports to China have ballooned lately and, alongside potential land grabs in Europe’s so-called “breadbasket”, threaten to trigger a meals disaster within the EU instigated by dropping one in all its most vital sources of crops.

The Chinese stranglehold on Ukrainian corn is a stark instance of how Europe is letting one in all its largest producers of staple grains slip from its grasp. Over the final 9 years, Ukrainian corn exports to China have risen exponentially: from the first cargo in 2012, buying and selling volumes rose sharply to make the Eastern European nation Beijing’s largest provider by 2015, when 90% of its imports got here from Kyiv.  The causes for this alteration in circumstances are twofold. On the one hand, the Sino-American commerce struggle has seen the US drastically fall away as a provider to the People’s Republic of China. In 2011/12, it comprised almost 100% of Chinese corn imports, however that determine had plummeted to only 10% by 2017/18. 

Meanwhile, a 10% drop-off in Chinese yields has precipitated important home shortfall. Though 10% could not sound like an enormous quantity, China is the second-largest producer of corn on the planet (behind the US), which implies that it should now fill a deficiency of 30 million metric tons (MMT). For context, it has not imported greater than 7MMT yearly within the final three many years. To resolve the issue, it’s presently importing a lot corn that its ports can’t deal with the inflow of tankers, which in some instances are compelled to attend weeks earlier than docking.

China’s surfeit is Europe’s scarcity

China’s all-out assault on Ukrainian corn comes on the EU’s expense – and it predates the commerce struggle with America by a ways. As far again as 2013, there have been reviews {that a} Ukrainian agency had agreed to lease 5% of the nation’s landmass (or 9% of its arable land) to a Chinese firm with a purpose to farm it for as much as 30 years. As a part of the deal, China would ship seeds, equipment, a fertilizer plant and a crop safety plant to Ukraine to assist within the cultivation of the crops, then purchase again the yields produced from the association.

Although it needs to be famous that the Ukrainian firm denied the reviews on the time, the steep upturn in agricultural buying and selling volumes between the 2 international locations within the intervening years can’t be ignored. What’s extra, the EU has far stricter directives and rules in place surrounding the usage of genetically-modified (GM) crops than Ukraine, which implies that just one GM plant occasion (MON810) is allowed to be used within the bloc – and even that’s banned in lots of member states. However, with the necessities for ecologically sustainable agriculture or agricultural imports set to bear a tightening within the near future, the attractiveness of the European market to Ukrainian exports will diminish even additional.

Food disaster on the horizon?

All this provides to a doubtlessly good storm for the EU’s provide of meals for its 447 million individuals. There’s no denying that the newly introduced European Chips Act and the makes an attempt at forming international partnerships are a step in the proper path in the direction of shoring up its entry to the semiconductors, and the truth that some 20% of the bloc’s €750 billion Covid-19 restoration fund is being diverted in the direction of digital tasks can be optimistic.

However, these in Brussels have to be cautious to not take their eye off the agricultural ball whereas pursuing different avenues of analysis, improvement and manufacturing functionality. Attempts to keep away from a semiconductor provide disaster are actually smart, however they need to not come at the price of instigating an identical predicament as regards to the EU’s meals provide. As such, the bloc should stay conscious of Chinese pursuits making inroads alongside its periphery, in addition to keep cognizant of Ukraine’s significance to Europe’s general well-being.


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