Socio-economic picture of the European livestock sector

Transcription

1 Socio-economic picture of the European livestock sector Christophe Perrot département Economie de l Institut de l Elevage EC-AGRI Workshop "Sustainability of the EU's livestock production systems" - Brussels /09/2016

2 Plan An approach by supply chains Where is the power / who are the leaders/drivers? What are the relevant markets? How to combine? Competitiveness? What s Competitiveness? Diversity and territorial issues Future of the CAP, a reason to believe in EU?

3 An approach by supply chains Financing (banks, processors, public support, ) Producers Non comm. organizations Cooperatives Private companies processors B to B Retailors Consumers. Domestic, European, International markets

4 Chains driven downstream. Imbalances and struggles in bargaining power Financing (banks, processors, public support, ). Take over. Investment. Volatility Producers Farmer s Unions Non comm. organizations Cooperatives Private companies processors B to B Retailors Consumers. Domestic, European, International markets

5 Chains driven downstream? «Integrated industry» (British Poultry Council), pig farming in spain (or beef fattening) Few stakeholders. Goat farming devolpment (milk delivery) in France (incl. New intrants) is highly linked to enterprises strategies Role of processors for dairy farming in France (from quotas to contracts A et B, industrial investments, ). Price for right to deliver milk to Xco, after quotas. Specialized Beef farmers in France intend to push their production into the chain (Cœur de gamme, Carrefour). Freedom to farm for milk producer in Northen Europe cooperatives?

6 What kinds of demand for European livestock products? Profitable, diverse but mature for the domestic market Especially for France (in value), biggest European market for consumer products (yogurt, cheese, ). And captive market (85% made in France) How to keep volumes & values? Livestock concerns at consumer/citizen level How to protect it (economically from volatility)? (Lactalis) Growing demand for dairy products on international markets. European advantages and recent development. Internationalisation & Liberalization. One World market (9% milk prod.) Different & specific patterns for beef, sheep, pig, poultry

7 Four kinds of concerns about livestock farming for French citizens Environment Animal Welfare Health Organisation GHG Water pollution Feed (GMO, ) Land & Water use (abusive) Status. Right to breed & kill an animal Life conditions & ethological needs Human-Relation relations Antibiotics epizootic diseases, zoonoses Industrial / Megafarm Spatial Concentration Smell, dust, noise from Delanoue et al, 2015

8 Five attitudes for French citizen/consumers Abolitionnism (already no or few consumption of animal products) Alternative. Disagree with current ways of livestock indoor farming. Strong reduction of consumption in progress or in mind. «Flexitarians» like. Optimisation. Consumption could be maintained. Ask for improvment & transparency in livestock breeding practices Competition awareness. Do not want strong regulations for domestic productions / abroad Passive consumption. No interest for ways of livestock farming, neither supply chains vitality. Adapted from Delanoue et al, in progress

9 Social, Ecological, Economic Goods and Services provived by livestock farming to territories PROVISIONING Food (healthy, quality), Fuel, Fertiliser TERRITORIAL VITALITY Employment in farms, supply chains, territories Attractive territory & social life ENVIRONMENTAL QUALITY Landscape (HVN) Biodiversity Nutrient cycling Carbon storage Water quality & Flod regulations Recycling of by products and unarable land CULTURAL Patrimonial products (PDO, ) Patrimonial, landscape (hedgerows, ) Agrotourism Genetic ressources Learning nature, living beings, farming From RYSCHAWY et al, 2015 NB. Commodifying non marketed Services and Dys-services can reverse ranking of production systems for costs of production (example FP7 CanTogether)

10 Competitiveness? What s Competitiveness? Ability to win / retain market share by facing competition on domestic and exports markets Price" Competitiveness (to reduce the costs of production ) Economies of scale : produce more? at what cost? Economies of scope: specialization or mixed farming? Economies of agglomeration : produce and process cheaper in more dense area Non-price Competitiveness (to increase the value ) Differentiation "delayed " (processing, marketing) vs differentiation provided by origin of milk Quality, innovation, services, image

11 A mosaic of milk fields Non-price Competiveness, diversity, «aménagement du territoire» 15% of dairy products differentiated from origin of milk 9,6% PDO 2,2% Organic Mountain s milk or Regional labelling Low land milk fields 45% dairy farms Mixed crop&livestock areas 29% dairy farms Some (world)-famous brands prefer differentiation delayed and added value created at processing level Diversity and competiveness: a long story Typicity, Resilience or obstable for rationalizing? Dairy mountains 23% dairy farms However price competitiveness is essential 42% of French milk production are exported incl. 12% to third countries (+4% in 7 years)

12 Employment: quantitative & quali approach Measuring direct & indirect employment linked to Livestock Farming (Lang et al, 2015) FTE 1.25 FTE off farm for 1 FTE on farm Induced jobs to be evaluated 3.2 % jobs in France. Much more locally (Britanny, Massif Central, ). Diversity vs Massification: jobs in French dairy industry vs in Germany LIVESTOCK OPERATIONS: DIRECT JOBS FTE (~ people) FTE producing the cereal consumed directly on the farms VERY DEPENDENT JOBS FTE ( people) MODERATLY DEPENDENT JOBS FTE ( people) MILDLY DEPENDENT JOBS FTE ( people) Different jobs/purposes for one activity: Partner in a collective farm (familial or not), entrepreneur managing employees and capital, high-tech individual breeder, alternative project outside mainstream, integrated producer by his neighbor,

13 Next Common Agricultural Policy, still a way for European intregration/cooperation Already statement of failure for CAP ? Unable to avoid crisis, to provide income, to help farmers in coping risk management Unefficient? In 2016 (France), most of livestock farms subsidies>>income After Brexit, still an ambition to go forward between MS, esp. for single European market Risk management (climatic, sanitaire, economic) Tools, stakeholders (PP/bank/contract), CAP/national tax policies What dose of market signals? Sensitive and difficult settings (US) To combine support for tackling comparative disadvantages and expression of comparative advantages (no market regulations) Support for functionning (basis for European standard + incentives topup to reward services) Support for investment (by avoiding unfair competition)

14 Thank you for attention Et Perrot C., Chatellier V., Gouin D.-M., Richard M., You G., Le secteur laitier français est-il compétitif face à la concurrence européenne et mondiale? Communication au colloque de la Société Française d Économie Rurale «Libéralisation des Marchés Laitiers» 9-10 juin 2016, Clermont-Ferrand France. Contact : christophe.perrot@idele.fr