The EC unveils its previsions for the EU agricultural markets

The European Commission recently published a report focusing on the medium-term outlook for major EU agricultural commodity markets and agricultural income until 2030.

With the world population expected to grow up to 9.5 bn by 2050, food production systems are under pressure to produce more while decreasing their impacts on the environment. Reconciling sustainability with productivity, ecological awareness, and economic development, while maintaining current agricultural practices will probably have negative effects – like resource scarcity, contaminated water, soil erosion - on global food production. The adoption of the Internet of Things (IoT) would help respond to the aforementioned challenges. How? The IoF2020 use-cases demonstrate the application of IoT components and their reusability while involving end-users in 5 trials: arable crops, dairy, fruits, vegetables and meat.

Currently, agricultural land covers about 45 % of the EU territory. Within this territory population growth is predicted to remain rather stable. Yet, the continued growth of the world population – especially in Africa and Asia – supports higher prices and asks for innovative solutions. Even though the total agricultural area has decreased since 2000, the use of fertilizers and pesticides increased while their efficiency decreased. Moreover, all available water sources are being used for irrigation. IoT technologies could be part of the solution to reduce the use of pesticide and improve water efficiency and management, through irrigation systems.

Changing consumer behavior brings potential for change

With sugar quotas coming to an end whilst its global consumption keeps on growing, the EU is expected to become a net exporter of sugar. However, changing consumer habits and rising health concerns will set a downward trend in sugar consumption within the EU. Consumers show clear preferences towards healthier food, which requires new incentives and policies to ensure a sustainable agriculture, which does not compromise environmental integrity or public health. To that end, the EU has several competitive advantages in terms of agricultural innovations since such developments root for technologies enabling sustainable value chains, food safety, and traceability.

Our lifestyles are changing in many more respects. Milk consumption is decreasing owing to public campaigns promoting lower intake of dairy products and the increasing use of lactose intolerance claims, among other factors. Despite a growing global demand, the EU has little room to expand its production due to the imperative to use natural resources sustainably. In response to this, operators involved in the supply chain will need to develop strategies to enhance products’ added value, such as cheese and infant formula.

Towards the future with environmental integrity in mind

Compared with 2008, greenhouse gases are expected to fall by 1.5 % and ammonia emissions by 10 %. In 2030, the projected average nitrogen surplus in the EU-28 will be 2.6 % lower than in 2008. Most greenhouse gas emissions, however, stem directly or indirectly, from animal production. Hence, sustainable intensification of livestock production systems might become a key climate mitigation technology. As the livestock sector is anticipated to benefit from steadily growing global demand and affordable feed, precision farming alongside agricultural intensification can further facilitate the reduction of pollutants.

In a similar vein, agricultural income per worker over the 2017-2030 period is expected to increase slightly due to continued structural change and the numbers of people leaving agriculture. Factor income, however, will stay relatively stable while the labour input steadily decreases due to technological innovation. Even small changes in production or efficiency can have major effects on profitability and productivity. Nonetheless, information and communication technologies (ICTs) remain underutilized in agriculture.

The environmental impact of the agricultural expansion depends on how it structurally responds to the demand. For instance, several recent consolidation waves in the seed and chemical sectors make the case for economies of scale. Hence, further modernisation of the fruit sector would achieve higher yields, due to the fact that old orchards are partially replaced with new plantings, new production methods, improved disease resistance and pest management. The increasing yields combined with a reduction in the production area are expected to lead to a stabilisation of production, resembling the importance of technological innovation in the agricultural sector in general.

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