EAAP Round Table, Bled (Slovenia) - 6 September 2004

"Europeanization of the animal agriculture: opportunities and menaces"

INTRODUCTION

Jean-Claude Flamant

In introducing this Round Table I recall the purpose of this activity within EAAP. Firstly, its main goal consists in giving time and providing place in the agenda of the Annual Meeting for discussion of controversial issues related to society in the animal sector - production, consumption, environment and so on. To enlighten these issues we invite experts on economy, sociology and policy which we are not used to hearing in the Sessions of our Study Commissions. May I say that another purpose of this Round Table is related to the wish of EAAP to expose the specialists in animal production to the large social, economic and political science issues, to gain a better understanding, and to integrate them as citizens in their own projects, activities and attitudes in relation to the various stakeholders.

The topic of every Round Table is usually chosen in close relationship to the current events. So, here in Bled, the reference event is enlargement of the European Union which occurred recently on 1 May 2004. What are the expected benefits and the consequences, positive or negative, of this enlargement for the economy, for society, for national policies, but also what are the possible risks for agriculture and more especially for the animal sector. Obviously, Europeanization brings a lot of questions which will be enlightened during this Round Table but maybe there is one major issue which covers all of them: the possible gap between the ambitious positive goals of the United Europe and the concrete consequences for farmers, consumers and citizens.

To stimulate our own reflections and our analysis, we invited firstly two reputed economists:

Emil Erjavec, Chair for agricultural economics policy and law of the University of Llubljana, who worked on quantitative models of the consequences of the enlargement for the various countries. He was heard by the British Parliament the last year on this subject.

Alain Pouliquen from INRA, Montpellier, France, who has been studying the changes in the agricultural policies and structures in Central European countries for several decades with the consequences on production and trade and their social implications. He produced an important report on this subject for the European Commission two years ago, focusing on issues of competition and policy

Then, Klaus Meyn, whom you know very well, kindly agreed to contribute to this Round Table by providing his large experience of contacts and co-operation within the German Federation of Animal Breeders and with farmers’ organisations in central European countries. He is a very astute observer of the actual farm situation.

On this panel, Franz Ellendorff is a more classical animal scientist. He is the Director of the Institute of Animal Breeding, in Mariensee, Germany. He questions the future trends of animal production in respect to the principles of sustainable development and in this framework he wants to outline the contribution of his research. He will also chair this Round Table. I give him the floor. To you, Franz.

Franz Ellendorff (Chairman)

I would like to break down this afternoon session: first we’ll have a brief introductory statement by each member of the panel and then we’ll have a second round into more depth and possibly a third round. Thereafter we will include the audience for questions. In fact that should take up a pretty large part of the discussion and finally, we’ll try to have an outlook on what to do about what has been discussed.

1. WHAT ARE THE MAIN CHALLENGES FOR THE ANIMAL SECTOR IN THE ENLARGED EUROPEAN UNION?

Emil Erjavec

I would like to discuss the scientific challenges from the political economy point of view. The first statement is that in recent years and continuing into the next decade there are important changes in public values and policy understanding of livestock production in Europe. Second, changes have come in the differentiation of the agricultural policy measures. These two changes also produce specific impacts on prices, on production, on trade, on farm structure, and last but not least also on animal science.

Alain Pouliquen

The topic of my contribution is the following: contrary to most expectations in the early period of transition, the agrarian structures of the Central and Eastern European countries, now new member states, has not turned into the predominant model of family professional agriculture of Western Europe. Rather, the main shift has been from the former dualistic structure to a new dualism particularly acute in animal production. The new context, enlargement, CAP reform, globalisation, will likely strengthen this dualism. In a first stage this could be detrimental to the overall level of animal production and to the associated employment. But in the longer term we have some good reasons to foresee a recovery of animal production in the new member countries.

Klaus Meyn

I wish to address in this discussion questions of efficiency and competitiveness. And all this I wish to put into the context of the questions of how to obtain or maintain a maximum share for animal products originating from the accession countries in the enlarged European Union. The second question is how to combine this evolution with maintaining as many jobs in the countryside as is possible, and the third question is how to comply with all the rules that exist at EU level that have to be obeyed.

Franz Ellendorff

In a larger consumer oriented Europe we have two responsibilities: firstly a global responsibility and secondly a local, - European level – responsibility. This implies for the first issue responsibility in relation to sustainability – a rather overstressed and overused term with many different facets of definition. The second issue is product safety – certainly a major one in the enlarged Community. Finally a third major point relates to the management of animal health including the spread of animal diseases across Europe.

2. WHAT MAIN FACTORS ARE PUSHING THE CHANGES OF AGRICULTURE AND ANIMAL PRODUCTION SECTOR?

Emil Erjavec

First, a very important factor which is pushing the economic and social environment of livestock production in Europe comes in fact from the agricultural political changes in the last two years. The CAP reform has changing values, changing policy objectives and changing measures. We can characterize these changes with three elements: first, “new wording” of the policy, second, “shifting political attention”, and third, “new policies”.

What does “new wording” mean? Now the policy makers are speaking about “multifunctionality”, “European model” of agriculture, “sustainability”, “decoupling”. In fact the meanings of these words and conceptions are not clear from objective perspectives. Often the words are without substantial content, are political and are only symbols that portray the changes but in fact do not have a real scientific base.

Second element: “shifting political attention”. After decades of a very conservative approach where the whole policy was oriented to the production and to the farmers, now we can say there is a shift in political attention from producers to the public concerns. This is a shift in the ideological basis. The European policy makers don’t change the Common Agricultural Policy as such, they do not change their objectives, they are the same as they were in the period after the Second World War, but they changed the wording and “public selling” of the policy. If we are cynical, we can understand that this shift in the policy is only to make the policy more “fancy”.

And then we have “new policies” in the EU agricultural framework. First there is the new direct payment scheme, called “decoupled single farm payments” which are quite different from what it was in the past. This policy has two expressions. First, we have the original model, historical payments, based on previous payments payed to the individual farmers, which means that the rich remained rich but they don’t need to produce more intensively and they gain the rents from land ownership. So it’s a switch from the production support to the value of production factors. And we have, I would say, a more decoupled, I would say also modern and fairer concept, which is this single payment per hectare for all producers inside one region. The last concept should lead to really significant redistribution of subsidies, between the farms especially from beef and sheep product producers to the plant producers.

All these changes are accompanied by “new requirements” and new costs to the producer, which should bring productions system into more favour with the public. This process is symbolised with “cross-compliance”, which is again a new modern word without clear meaning – also policy makers have a problem to explain even one year after the reform was settled. However, the burden of new requirements is very heavy especially in the livestock production. Another medium term development is the end of quotas as political instruments: it will come in ten years. There is also the invisible end of export subsidies, which means the end of the market intervention systems, which for 50 years have kept prices at the settled level in comparison to the world market prices. The last significant shift, important for European livestock production is a shift in the rural development policy. New measures, doubling of the budget, and also new concepts are proposed from the European Commission. This has to be the real reform of the European agricultural policy. However, somebody from outside could understand that this policy is more oriented to the fears of public concerns from the 5 or 6 richest European Union member states and not to the concerns of agriculture and rural areas from EU-25.

In the end all these changes in policy will have some significant market challenges for livestock production in Europe. First, there are no general changes in consumption. We can expect more or less stagnation or a slight increase for livestock production. However, some trends from the past like the shift in the consumption from red to white meat, from fat to the so-called “cholesterol free meat production” will have significant impacts. This is valid especially for old EU member states. Due to the low income status in new EU member states we can expect further increase in consumption for all type of meat and dairy products. The changes in the level of producer prices, will face also very important changes, at the EU-25 level. It is expected that milk price will decrease and, with decoupled payments, in fact the income attractiveness of milk production will be really shifted. This could lead to the trend that again the breeding of dual purpose cattle will become more interesting. In the meat sector some international modelling experts predict a producer price decrease in the pork sector, and some expect an increase in the beef and poultry sector. On the production level, we can also say that general milk production in EU-25 will more or less decrease in the next ten years but especially in the new member states where the dairies and farmers are not in good competitive positions relative to the old EU member states. Then we have a significant decrease in beef production because of decoupling. We have a decrease in pork production especially in new member states. Poultry are perhaps the only case in livestock production where we can expect a better position, in the medium term and this especially in the EU new member states.

To conclude, we have, as Mr. Pouliquen said already, more or less the start of bi-polarisation, of dualisation of agriculture and their production systems: on one side large, industrial, very competitive farms which can make real business from livestock production; and other side, we’ll have more and more regions where the subsistence farms will be under strong pressures, with increase of poverty and so on. Eventually, from the cynical point of view, somehow in some regions we’ll have similarities with our America cousins or as in Portugal after their accession. This will mean big contrasts and only a few farms and production systems will really gain from these quasi reform developments.

Alain Pouliquen

Let us recall first that the gradual institutional and structural building of the EU-15 model has benefited from an exceptional effect of favourable macro-economic and socio-political conditions since the 1950s. Since 1990 in the CEECs much less favourable conditions prevail and the structural legacy of the former system has generated quite different national developments. First there has been conservation or even a large expansion of micro and small individual farms at the level of subsistence and semi-subsistence. Second the survival and gradual consolidation of macro-holdings mainly from former collective and state farms into companies. This also applies to their livestock units after an initial recession. And third a new minority sector of large individual farms appeared, more or less of the EU type. These also came from the former socialized farms, but overall this third sector tends to specialize in large-scale crop production with relatively low animal density per hectare. As a consequence the structural dualism remains more acute in the livestock sector than in the crop sector. However, we shall come back later in the discussion to the milk sector where a minority group has appeared consisting of highly selective professional animal farms of the EU type, for instance in Poland and Lithuania.

But what will happen in the future? In a first stage, there are reasons to foresee the continuation of current tendencies, i.e. on the one hand a gradual exclusion of the subsistence sector from the main agri-food channels and, on the other hand, a slow and highly selective emergence of professional individual farms in animal production. However, we have to de-dramatize to some extent the decline of the supply of the semi-subsistence sector on the markets, and/or its social and structural consequences. Firstly the growing access to the two pillars of the CAP assistance will facilitate the resistance of this sector. Secondly, in a large part of this sector, the family incomes originate in majority from outside agriculture, namely from retirement pensions and from non-farm employment, notably “commuting jobs” (weekly or daily shifts towards towns) and seasonal migrations towards the countries of the EU-15, with money coming back to the family. It is another way of resistance. You have also these other devices that are self-supporting, some labour-intensive specialties, direct local sales and “organic farming”.

Concerning the company macro-holdings, it is difficult to predict confidently on their economic prospects but overall they attract growing competitive advantages from their large structures and, after improvements in their productivity, from their low labour costs. Also as shareholder companies they could better solve the problem of succession which is more and more challenging in the prevailing family farms of Western Europe. On the other hand, there are the weaknesses of these macro-holdings. I refer notably to the insufficient legal protection of the long-term disposal of the land, which is generally leased, against lease or ownership transfers in large blocks to individuals or to external company holdings. Indeed such transfers have generally led so far to specialization in large-scale crop production that is detrimental to livestock production. Further, the new simplified system of single payments per hectare could also have this kind of effect.

Finally, the hindrances faced by intensive professional agriculture, especially in animal production, is essentially connected to the fact that these countries are not in a position to build quickly and on a large-scale the institutional and agro-industrial framework that has been the sine qua non condition for the development of intensive family livestock farming in the EU15 since the sixties. But the recent dynamic in some sub-sectors, notably the milk branch, give some good reasons for hope in the longer term. Thus in the future we have reason to anticipate the eventual recovery of animal production in the CEC.

Franz Ellendorff

In the context of animal agriculture the over-used term sustainability needs attention to correct the false hypothesis that extensive animal production is per se congruent or identical to sustainability.

In general, sustainability relates to-day’s actions to future consequences. This has been subject to discussion in a special issue of Nature (Nature 418, 667-707, 2002). A short but pointed definition could be: “Sustainable Animal Production and Agriculture implies the highest possible efficiency with the lowest possible future damage”. I think that is a good guideline for animal production and is in contrast to the unilateral propagation of extensive systems as a solution to environmental and natural resource conservation. Highest efficiency with lowest possible damage does not however apply to every geographic region of Europe. Soil structure and environmental frameworks etc. need consideration. Three examples (dairy, pig, poultry) of high efficiency and low damage systems may underline the above statements.

Dairy Cows: Here we assume the demand for milk is constant (not considering changing consumers’ attitudes and not considering global increase in demand such as in China or India). Let’s compare a 4000 kg per year cow with a 2000 kg per year cow. First, we would need two cows instead of one to produce the same amount of milk. Feed efficiency is largely based on maintenance requirements which are higher in two rather than one cow. Excretions are less in one rather than two cows. There are tremendous differences for protein and phosphorus excretion if you consider total production.

Pork: For fattening pork at a daily gain of 570 g compared to 630 g per day, we need an additional 22 kg feed and 65 kg water. Considering that water in large parts of the world and also in some parts of Europe is a limiting factor, this can have a vast impact on natural resources.

Finally broiler production: If we compare high intensity (indoor) production systems with low intensity systems then feed efficiency is e.g. 1.76 kg and 2.8 respectively (my own observations). 50% of the phosphorous uptake is excreted in the high intensity system, 67% is excreted in the low intensity system. Similar figures pertain to other nutrients. The waste of resources is obvious. Furthermore, if you assume 10% of the total broiler production in Europe (15) to be low intensity about 63.000 tons additional feed would be needed when compared to high efficiency production.

These three examples show that low intensity systems are not necessarily sustainable and resource friendly As far as food safety is concerned, I think there are European mechanisms executed by various agencies on the European national and sub-national levels which provide food safety to a degree that is outstanding worldwide.

Klaus Meyn

If you look at the animal production sector of the accession states of Central and Eastern Europe, the three main kinds of production have an efficiency which corresponds to only three quarters of the efficiency of animal production in the existing 15 EU member states. This is a big difference. I am fully aware of the fact that because of lower prices, intensity of production in these countries is probably not so high as in Western Europe but it is a major factor of making the results different, especially where you have enormous feed input, as in pigs. Pigs are not efficient enough, dairy cows are not efficient enough, and beef cattle are also not efficient enough. But now, as the Baltic states have experienced already during this summer, the ball game is quite different. Once you approach EU level milk prices, you can also be more intensive on the inputs and probably there will be results. But I think, despite the low labour costs in most of these countries, there is an issue of low productivity. And as production technologies are known, the question has to be asked how do we get better feeding regimes, better genetics, better housing and management, and which are the transporting channels through training, extension, and if at all necessary through experimental work and through research.

The second point that I would like to make addresses the whole production chain. We have discovered in the existing EU that certain clustering reduces production costs enormously and makes the whole system more effective. That is, where you have density of production, you have lower input cost, you have lower marketing costs, and therefore farmers have higher benefits from what they are producing.

Now, with these short statements I would like to come to competitiveness. Let us first look at the natural conditions, and then at the feed production potential. It is quite obvious that the grazing conditions in virtually all accession countries are not as good as those in countries that are situated on the Atlantic or on the North Sea coast. So, here the area will not be able to compete, but probably the forage growing potential on crop land has not been fully exploited and needs further exploitation. There is also good grain growing capability to feed animals, and especially I would consider that the grain maize production in the Pannon plains or in the Southern states provides very important basis for future animal production.

Another point is the housing requirements. In the accession states housing is much cheaper because of lower labour and material costs, but compared to a farmer in Ireland you need more housing. Housing must be more solid because of the climate here.

As far as farm structure is concerned, Dr. Pouliquen has already outlined the issues, but there are many household producers who are not efficient enough in their business and unfortunately there are also many large farms which are not managed well enough and this also reduces competitiveness. And bear in mind: we have, especially in the dairy field, a worldwide development of increasing farm sizes. If you go to New Zealand, to the United States, to the existing old EU, the same trend goes on every day.

So, on balance, the areas of the new member states are competitive because of low costs, but watch it, there are development needs to improve this competitiveness or to maintain it.

Then we come to the other side of the food chain which is getting food to market. Connections are needed to access the emerging market while also facing the problem of defending the home market here. The other problem is how to get into existing markets in the old EU countries.

3. POSSIBLE BENEFITS AND COSTS OF THE CHANGES, RISKS AND FEARS TO BE FACED THE ANIMAL SECTOR

Emil Erjavec

I think we never had such a case that three such important elements of agriculture are so separated from each other as they are at the moment: public concerns and values, real production systems and animal science. Public values and concerns are, at the moment, very naïve and ideological: organic… vegetarian… sustainable… But they never touch the real problems of the rural regions and agriculture. We are still far away from the new concept of agricultural policy. I hope that the current reform does not conclude but rather opens a new state of change. The agricultural producers are still production oriented, do not see the changes in public values and the concerns of society have little real impact on them. They still like to produce without considering any impact on society and so on. In the development of production systems, it is more necessary than ever that new ways of thinking are closer to public values.

The sad point is that research is not filling this gap. Classical animal science disappeared from the public arena: not at the national level, not at the EU level; you no longer find classic animal science topics like nutrition, breeding... Today it is only applied biology, biotechnology and so on, and all these modern things… I would say they are more oriented to themselves, to produce science, but still not to produce the value added to the existing production systems, not connecting public values with producers’ orientation. This is of course not the obligation of the science, but who is then responsible for the future of the production systems and technology? So we also need reorientation here, some new program of animal science, heretically said also less genetics, but a more heuristic approach, and new values. Of course this is also very naïve.

Franz Ellendorf

I may inject one question. In speaking of public concern, I would divide it into three points. There is a real concern, as I would say that feeling or whatever is mainly based on ignorance – lack of information. And then, the second which is probably the opportunistic concern: that is to say that my main concern is to get a larger market share. And the third type of concern is the forced concern. The forced concern relates to “there is a problem because the European legislation says so”, whether it’s existing or not. We all know how these concerns are controlled. Would you agree on that?

Emil Erjavec

I agree that we live in a very bureaucratic and very political world. And that nobody really understands what’s happening. And each view has a problem to understand the others. I think that public concern is largely a political and emotional value. It comes from the public debate taken by the politicians and at the end we know that this is irrational. It’s against logic and against science - but what we can do? I think that animal science faces a growing need for a new public relation policy, but sometimes we have also to rethink our rules and obligations.

Alain Pouliquen

Of course there is the necessary improvement of productivity. To reach half of the average level of labour productivity in agriculture of the EU-15 would imply the destruction of 4 million jobs in agriculture in the ten CEEC states (including Bulgaria and Romania). But fortunately the real processes will not follow this catastrophic scenario which perhaps could apply more easily to the industrial sectors because the sector which is involved here is in fact only partially agricultural. I repeat, a major part of the subsistence and semi-subsistence farmers get a large part of their family income from outside agriculture which facilitates their very low-productive agricultural employment to resist pressure to change and is an alternative to unemployment. Of course this does not preclude the case of impoverishment - in some regions of eastern Poland for instance - when non-farm incomes of concerned families are not sufficient to compensate their exclusion from milk collection which has resulted from the recent closure of dairies and slaughterhouses which were completely unable to reach EU standards. In these regions for instance, clearly there is a real problem. But at the same time we heard about out-migration, temporary migration, of people from these regions to Western jobs as in Germany for harvesting apples and things like that. That does not allow us to ignore the problem but we must not take it overall as so catastrophic as at first glance.

The access to the full set of EU subsidies (direct aids, rural development, certain items of the structural funds) will also greatly help the subsistence and semi-subsistence sector to endure and survive. Indeed the basic direct aids of the EU - even at the gradual level of 25% in the first year and so on, supplemented by 30% national “top-ups”, are not a negligible resource for families of many regions. One reason is that in terms of purchasing power of consumption goods, one Euro in Poland represents about two times the same sum for instance in France. So it will be a critical supplement to family incomes in many micro and small farms of subsistence and semi-subsistence.

There is also the frequently mentioned potential of European “organic farming”. It has been exaggerated because there was the tendency to underestimate all the organizational requirements to obtain genuine validation of this new quality of the market, on the German market for instance, and on the EU market more generally. Nevertheless we observe a real emergence of this type of farming and real efforts by some governments in encouragement. So that would be also another income supplement.

Finally there is also the crude fact, the brutal fact that there is no alternative for many of these families that attempt to resist and in such a situation there is some logic of inheritance for keeping their land.

So, if you take this set of factors, we can foresee that contrary to the former history of EU-15, 25 % of the total farm area in Poland could be durably kept by the subsistence and semi-subsistence farms, despite a strong decrease of farm income from the market. But after all – in view of the relative abundance of land per inhabitant in most new member countries – that could be a better use of the land resource, socially and macro-economically speaking, than any attempt to generalize intensive agriculture and animal production at any cost.

Franz Ellendorff

From the rural point of view, Klaus Meyn, do you see risks or benefits from the enlargement and from those issues you addressed on the production side?

Klaus Meyn

One of the fields that seemed to have a large opportunity is milk and that is subject to a quota. So that there is an upper limit to how far you can develop. And the other field of competitiveness where really many people are involved, is pork. We have to discuss this. And maybe there are some opportunities for beef. But poultry - that’s a pretty standardized job - it is produced on a large scale and on a factory scale anywhere in the world. So this will employ little labour: it will be at the same level of efficiency, it will grow - the proportion of poultry grows worldwide, this is its natural development. Poultry meat is the cheapest and therefore it takes a larger and larger share. Pork keeps its share and beef is declining. This is the overall development worldwide.

So these are the benefits and the costs. But if we look at risks, that is what Professor Pouliquen has outlined in detail, the problem relates to people and how to enable the maximum number of people to benefit from these developments. As I said, pork and milk production are probably the most labour intensive systems of animal production and all opportunities in designing the right schemes have to be employed to get as many people involved as possible. There is a chance that in the whole chain more people will be needed. For instance, if a country wants to enter the West European market, it has to have controlled production and that needs quite a lot of manpower input. It will make production more expensive but that is the only chance to get into the market. And because labour costs are so low here, you are comparatively cheaper than doing the same job, for example, in the German environment.

And then, Professor Erjavec has already mentioned something which I think is very important. And I admire the Slovenians for the way they have designed their policy in preparation for membership in the European Union. They seem to have maximized their benefits. And I believe they have followed the new decisions that have been taken at the Brussels level. There is one open question: is there a future for the suckling cow or is it more appropriate to think about the dual purpose type of cattle? The dual purpose cows are not giving so much milk per cow but they produce a heavy calf which the fatteners of Europe, whether in your own countries or whether in western Europe, would like to fatten and thereby maximize your incomes from the cattle sector with the existing milk quota.

Franz Ellendorf

I have one more question. Wouldn’t it be just in those cases where land is the restricting factor and that is probably in all small holdings which are quite common in a number of new member states, wouldn’t it be interesting for them to introduce those production lines that are rather independent of land, that’s the high intensity poultry production, the high intensity pork production? This question hasn’t been mentioned yet – will there be a chance for that? There also have been enough family members in areas which offer alternative employment and so they don’t need to work on the land which probably cannot offer them employment.

Alain Pouliquen

Indeed we have the paradox of the relative under-development of this type of high intensity pig and poultry production in Central and Eastern European countries compared to the EU-15.. It is a paradox because that could be a device to turn the obstacle of a highly fragmented land structure, for instance in Poland where there are plenty of potential candidates. There is absolutely no shortage of young Polish farmers, now inefficiently employed, who could embark willingly in this way. So, why has this way developed so little since ten years? I cannot find any other valid explanation than the lack or shortcoming of the needed agro-industrial environment and professional organizations. If we make a comparison for instance with the very intensive basin as in Brittany, Western France, with its agro-industrial network of slaughterhouses, feed industry, frequently in cooperative form, and the producer groups, we find an agricultural system that is very highly organized for intensive animal production at regional level. So the building of these professional organizations and connected agro-industries was crucial to allow the Breton farmers to embark and, on average, to live in this way rather well for the last thirty years by importing the majority of the fodder units from other parts of France or EU-15. So, that could be a way and I have no doubt that for instance Danish investors are preparing or initiating scenarios of this type but probably till now at rather selective scale, i.e. only in some locations meeting especially favourable conditions.

Emil Erjavec

I don’t agree that the small farms have a good future potential. There is a huge human constraint especially in the new member states. These small farms are strongly correlated with old age, less education, less initiative, subsistence. So, I think if somebody’s willing to grow, especially in the new member states, the future potential is in growing. And I think that development will go more in direction of larger farms, one part of them very extensive and use of land and the other part organized with industrial systems but I don’t see the possibility of the development of livestock production in small units especially in the new member states.
Klaus Meyn
I would rate dairy production as the most convenient for the small holder, because it is most labour intensive. The only snag is that the requirements for milk quality have become so stringent that frequently small holder farmers cannot make it anymore and go out of milk production. But milk is more convenient to the small holder than pig production. Pig farmers who are successful grow fast and will become big farmers. And I think we have to bear this in mind. But if you need land, I think this is another issue which has to be addressed. Why not develop a lively land rent market so that land does not need to have to be bought but can be rented, which is a modern approach in many countries?

Alain Pouliquen

This is a perfect illustration of what I mentioned about the inadequacy of the legal and institutional framework, in the case of land policy. But in this case, we touch on the social-political reality. In some important Eastern countries the population concerned with agriculture, mainly the little landowners, is large. Their political weight is very important and they played a great role in the governmental coalitions till now, notably in Poland and in Hungary. And it is not by chance in these cases that any project of giving more security to leasers, through rental contracts of nine years (generally renewable) as in the French “Statut du Fermage” or in other western countries, has been considered with some reluctance and rejected, quite logically in my opinion, by the small owners’ leaders. The latter are also reluctant to see, for instance in Hungary, the managements of the former collective and state farms becoming landowners, or quasi landowners through long term leases. And it’s a pity because this question of law on land lease is of very great importance for the economic future of large-scale individual and company farms.

Emil Erjavec

I think that creating a market for renting land is the perfect idea but is also the perfect illusion. For efficient land renting market you need an efficient, modern and well organized state. That is not the condition in the new member states; it is not even the case in the majority of the old member states. So I think, theoretically it’s OK but practically no!

4. THE ROLE AND THE ISSUES OF THE ANIMAL SCIENCES

Franz Ellendorff

We now address the final point: What should we do about the challenges, what should be done as far as research is concerned, what is the role and what are the issues of the animal sciences. One point has already been made: Creative solutions. I would like to ask the panel what is your position on future necessities for the animal sciences, not only animal breeding, but animal science in general.

Emil Erjavec

I think we can divide the opportunities between animal science in old member states or old Europe and new Europe, new member states. And I think that the golden age of animal science in old member states is over but we need some, I would say, systematic reorientation of the concepts of the science as I mentioned before, a new partnership between the scientists, between the disciplines, more attention to the environment, more attention to the new production systems related to new public concerns. However, my concern is more relevant about technology research in the new member states where I would say animal science first has to be developed at the appropriate level. I think it’s very dangerous that we have rich funding of animal science in Western Europe and I would say not so organized, less funding, with less ambitious science in the new member states. I think it is fair and I would say future oriented that new animal science centres, modern animal institutes in the new member states will be developed. I don’t see why INRA, because I know there are a lot of funds in France, more or less “everything is known” - I provoke - why doesn’t INRA make some institutes in Poland or Deutsche Forschungsgemeinschaft in Hungary and so on with training centres. Europe has to develop animal production and animal science in the new member states. But for the end I would say we have also to stop speaking about this division of new and old and CEC and West and so on. I think we have to speak about animal science in Europe and I think that the problem of the less efficient Polish dairy producer is the problem of Europe and not the problem of CEC or Poland.

Alain Pouliquen

It seems to me that the debate demonstrates continuously that research uses the approach of livestock systems, that can take into account the complex determinations and inter-relations at work, in various conditions of the new member states. It is my only remark, as an economist, not as a researcher in zoo-techniques.

Klaus Meyn

I would not emphasize so much production technology research - we need training and extension because a lot is known worldwide and we don’t need so much new knowledge. Where we have an enormous gap of knowledge is in these fields that are relatively new: animal welfare or like pollution and what the effects are of certain influences. As an example, I can tell you about research on animal transport which our organization has funded. There are certain EU rules that you have to obey if you want to transport animals. Our organization represents many animal breeders who are exporting pregnant heifers. And we found out that the rules to a certain extent were completely wrong because we had to load and off-load the animals after a certain time, then rest them downstairs and then reload them again. When we unloaded them, firstly that was a stress factor; the animals remaining on the vehicles were not stressed and secondly, in these unloading places the animals infected themselves with certain diseases. So, I think we need a much sounder scientific basis for the rules that we have to follow.

Franz Ellendorff

I would certainly see one priority namely to place research on whole production systems rather than single production elements. Such is in particular interesting in the context of a Europe of 25. Not only animal scientists are asked to get involved but plant scientists, economists, nutritionists and possibly sociologists to assess the impact of production systems on animals, environment and on the rural population.

The first step that needs to be done is to analyse the existing systems, especially those that are either advanced, for whatever reasons – political of otherwise enforced, or trendy. Public perception of certain production systems is rather volatile in some cases and also quite wrong in other cases. The goal is to provide objective information to the public and at the same time provide to the animal producer hints on existing problems or where to improve their production systems. Geographical, topographical, climatic and all possible aspects need consideration and need to be placed into one single analytical study.

We have done a model study in this direction with broiler production. Significant results can be reported on product quality, but how does the consumer perceive a product from different production systems. Thus the interdisciplinary, analytical approach of production systems with the idea of improving them is one major task. The results can also lead to an understanding why in certain parts of Europe or within a European country, certain production systems are successful and why other production systems are not viable under the circumstances prevailing. We do have production sites which are open to high intensity, we do have production sites with low intensity, we do have production sites where you are forced to stick with one type of production, such as natural grassland where you can’t produce other things except beef or dairy products.

The second major line of research is new technologies on several levels. It is no longer a question of whether or not we should employ new technologies but how to employ them, so they can be in line with public perception and so they are employed critically before public perception attaches negative attributes to them. But we cannot withdraw from further developments of new technologies. For example it is important to have tools available to cope with emerging diseases – tools that are based on progress in the molecular field.

Research in the reproductive sector is equally important.. For example gender determination, that is using only sexed sperms to influence the sex of the progeny. This could solve a number of publicly discussed problems relative to animal welfare or transport. It will also assist in the improvement of farmers’ income. It is still rather expensive and technically also limited, but it is on the right track. Embryo transfer is a common technique and more so AI. But research should also continue - despite the little progress made on the practical scale - think on cloning and even transgenesis. I am aware this is a very hot public issue with a very high degree of consumer concern. Nevertheless, this should not prevent science from continuing to develop better tools and better possibilities that will eventually take account of consumer demands, consumer fears and consumer concerns. Rarely has a new technology started immediately on a practical scale. I think we are responsible as scientists to go into these areas. Genomics, a very large field of interactions between genetics, physiology, biotechnology and bio-informatics is surely one of the future areas of research.

QUESTIONS FROM THE AUDIENCE

Jože Verbič (Slovenia)

I would like to address a question on the competitiveness of large-scale intensive animal husbandry systems. Has anybody tried to calculate all the costs of the BSE crisis and to allocate these costs only to the milk which was produced by use of the problematic meat and bone meal? Similar problems occur also in other aspects, for instance the problem of antibiotics and other drugs which can be found in the milk. There is a problem if the costs of the control are to be covered completely by the animal husbandry systems, in effect by both those in small-scale production and in large scale production. But I would like to propose that the large–scale production should pay all the costs of the control because it was not caused by the small-scale production. So, as a general calculation, I’d like to see some numbers, if possible.

Klaus Meyn

Unfortunately BSE is not a disease related to farm size. This is the problem. The disease BSE has nothing to do with large or small farms. It just occurs in animals that have consumed contaminated meat and bone meal. And therefore, I can’t accept this as a real question. It was a very sad event, and I personally have suffered very badly from the crisis in my job during the years when it happened, but I don’t think we can put it into this context.
You then mentioned antibiotics. There are very important rules as I stated which all have to be obeyed and this will be quite difficult. And the testing would be quite difficult. And therefore, production control is a very important feature for the future: that you have a control mechanism, that the farmer is also guided, that he buys feed, for instance, where there is a high degree of certainty that feed is not contaminated, that it is feed where the rules are obeyed. But this in the past unfortunately did not exist. That is why at first in the United Kingdom and later on in other countries the BSE was able to spread so badly.

Franz Ellendorf

Yes, and it’s probably underlined by the fact that in Switzerland, which is certainly not a large-scale cow production country, BSE has occurred on a large scale. It is also interesting that cows seem to get BSE without even having had bone and meat meal.

Jože Verbič (Slovenia)

Can I explain? I start by speaking about large-scale intensive systems and by looking at the biological reason for feeding the problematic bone and meat meal. We produce cows with very high lactation which demands un-degradable dietary protein. The problem is that these cows are not able to meet their requirements from the usual protein sources and so consequently bone and meat meal was included in their diet. So the real reason for BSE is related to the intensity of milk production which is particularly a feature of the large-scale production systems and not of the small subsistence farmer.

Klaus Meyn

Well, we are talking about ruminants and ruminants can also assemble their protein from the rumen. So, it is mainly an economic question. And traditionally, the protein feed from animals was double the price of the protein feed from plants. So there was no danger. But when suddenly the protein meal was so cheap because there was no market anymore, it was smuggled, and all these accidents happened.

John Hodges (UK)

It’s very wonderful that we have a European Union of 25 members countries, and it’s very easy for those of us from the West and the old 15 to take a posture which perhaps we don’t do deliberately but to imply that we have a good model for agricultural production in the West and the new members, the ten, should move towards adoption of our model. We have a tendency to talk about productivity and efficiency and competition and that’s the road which we imply they should take. I think this is a subject that needs a little more debate by the panel. Our model in the West has produced many problems, problems of environmental pollution, problems of surplus foods, problems of quality on occasions, pollution of the air and the water. And of course, it’s not a sustainable system. We are putting billions of euros into it. It isn’t as though it is already the most efficient free-standing system. We are putting an enormous amount of money to support it. And of course we know that the Common Agricultural Policy has been reformed and the objectives now are to promote the quality of rural life, to produce a sustainable environment, sustainable agriculture, and sustainable economies in the rural areas. So, this new area of policy which can provide the direction for development of farming in the Central European countries needs a little bit more airing on this platform. I was very pleased to hear our speaker from Slovenia talk about the need of animal scientists to begin to look at more creative solutions on a system basis, so that we are able to meet the new criteria for which the reformed EU policy calls. So, accepting the fact that subsidies are going to be with us in the European Union, at least until 2012 and probably beyond, the question may well be why are we still driving so hard for efficiency and biological conversion and these other issues which in fact have been the cause of so many problems in our existing model in the 15 member countries?

Klaus Meyn

Thank you for this comment. It’s probably right that so far we have spoken too much about the mere effects of efficiency. But one of the objectives, which I think is the major one, is that in these market conditions the farmers can survive and earn a living. And I have referred to many constraints, to many rules that the EU has brought in and which are in favour of sustainability and this imposes a lot of obligations on the producer. But I hope that you can agree with me that the major objective is to keep many people productive and earning an income from the animal sector. That, to me, is the overriding objective, more important than all the other sidelines which you have mentioned.

Franz Ellendorff

Is that efficient? Increasing efficiency doesn’t necessarily mean you increase production. It’s just that you improve the input-output relationship. That is always justified. This has nothing to do with any other aspect, but you do the least damage to the environment, you have a low use of resources. I would always stress the point that efficiency can only be beneficial until you get to a level where animal diseases increase or where you compromise product quality. But if you improve efficiency within limits of the animals’ physiology and genetics I see no problems. However, if you try to overstress efficiency without considering limits you get permanent damage. It is probably a very important challenge to science to define these limits, to recognize the range where the animal still functions normally without being more prone to diseases or stress or whatever you call it.

Cled Thomas (UK)

I wonder if you could consider perhaps a longer term scenario. John Hodges said that 2012 is a long way away. Well it’s not a very long way away in agricultural terms and in terms of agricultural cycles. And the scenario is really that the current EU reform, which affects both the past members of the EU and the new members, is only the first step on the ladder. And I think that was referred to before. And it’s the first step on the ladder which is basically to have a subsidy-free agriculture in Europe. And I think what we have to consider is animal farming systems, livestock farming systems, within that kind of scenario. Now that doesn’t mean that rural communities cannot be supported. But rural communities will be supported through a social policy and not an agricultural policy. And it doesn’t mean that there can’t be environmental goods. Because environmental goods will be paid for by the government in terms of contracting them. Now that I think is a more reasonable long-term scenario and the animal enterprises will exist because they can compete with the world or they can deliver environmental goods. Can you consider that scenario which is post 2012?

Emil Erjavec

I think we have a frozen situation for Common Agricultural Policy until 2013 and the size of funds for agriculture remains more or less on the same level, and we have this last proposal from the Commission for the budget 2007-2013 which probably will go through next year, is that the quite more important rural development policy in size and scope will be upgraded. And in fact the CAP is going in a new direction: out of agricultural support into the rural development support. It’s very optimistic but I think the policy makers made a mistake. They changed the system, they changed the policy, they doubled the money for rural development but the matters are still the same. So, we don’t have initiative, we don’t have ideas in fact in Europe, how to support the rural areas. And I think that this is one of the key problems of the EU-25. The agricultural society is here, is asking for the money, the budget is here but is going for I will say more and more funny issues, like I don’t know, less favoured areas support, like early retirement, like farm diversification… What this means is that each farm will have farm tourism?

Klaus Meyn

Well, I think the time horizon of Cled Thomas: 2012 is fair enough. But to think too much about the time beyond is very risky and dangerous. I read an article last week in “The Economist” about Argentina being ploughed up for soybean production for China, to provide China for its requirements for soybeans. Now we may face a completely new situation on account of the demand from China; we may face a completely different world by the year 2012. And if we look at our subsidies, there’s another point. We have an artificial milk price at the world market level, because the quantities that New Zealand and Australia can produce at world milk prices are very small and the potential of expansion may not be that much. And the subsidy levels of the United States and of Europe are almost the same for milk, so the only question then is beef. Admittedly, there the European Union is subsidizing heavily. But there’s not so much left: for pork and poultry the subsidy is on the grain, it is not on the production, there are no premiums. So, the pork or poultry producer, he already produces without subsidy. It is very speculative of what the situation will be in 2012.

CLOSURE

Jean-Claude Flamant

I propose to conclude this Round Table by pointing out four questions for the future of the animal production sector in Europe : Opportunities or menaces of the European integration? A new production model? Agriculture policy or rural policy? A future role for animal science?

Opportunities or menaces of the European integration? The first purpose of this Round Table is to stress the historical detail and accuracy of the economic context of agriculture in this process of European integration. Particularly, we point out the fact that agricultural policy was at the heart of the building of the original European Community in the 1960-1970s, supported by the favourable overall economic development of the Western countries which provided the needed financial resources to farmers and their organisations. This is not now the case for the new members of the European Union as well illustrated by Alain Pouliquen: the political integration is a goal per se whatever the real consequences and difficulties for agriculture, and the available financial means are considerably reduced and dedicated to the strong necessity of investments in infrastructures and equipment. Finally on this point, I note that the members of the panel are agreed that “opportunities and menaces” have to be assess in considering the present evolution toward a “dualistic” model of production structures, either large extensive farms, or small subsistence farms: the two models have not the same prospects and opportunities in the new enlarged Europe. The large extensive farms could be competitive in agribusiness, but the social and human reality of the small holders could hamper their potential interest for the development of milk production in the framework of the European rules.

A new production model? Bear in mind that we wished to have a discussion about the possibilities for the new member countries as they explore and develop new ways for animal production which could be different from the intensive ways of the old countries which, in addition to providing self sufficiency of food have had a negative impact on the environment and natural resources. In fact, the countries of the original European Union for several decades were able to carry out an evolution of their agriculture characterised by a majority of familial and intensive medium-sized farms. This model does not operate today in the new countries. Due to the desire for rapid integration after the fall of the Berlin Wall, more rapid progress is planned than occurred in the old countries – may be ten or fifteen years compared with two or three decades. So the social role of the small subsistence farms is highly crucial. Ensuring survival of these small subsistence farms for at least one generation is probably a major challenge for European integration, otherwise the consequences could be strong rural depopulation with a major risk of intolerable unemployment in the cities. And, as stressed by Klaus Meyn, the immediate impact of the rules soon to be decided by the European Commission in respect to food safety could be economically destructive for the milk and meat industry.

Agriculture policy or rural policy? Today, agriculture now is subject to considerations which are outside the production sector. It is interesting to hear Emil Ervajec express his understanding of the evolution realised during the recent negotiation period. For him, the new European policy is mainly made by what he called “new terms”. The attention of the political decision-makers is moving toward what is called rural policy but without clear and imaginative objectives. Is it true that the new way will be a subsidy-free agriculture for the whole of Europe, old and new countries in the framework of a “rural policy” with social components, as it was mentioned in the audience? One real difficulty for making a suitable forecast is the evolution of the world market with the increasing demand of China, stressed by Klaus Meyn, which could deeply change the international context of the European policy.

A future role for animal science? This was the last question… This topic should be framed in the context of greater uncertainty about the development of agricultural, economic and social policies in the new member countries. A first unanimous response is that the “golden age of animal production science” is over. Nevertheless there is a place for research, but what type of research? The argument of Franz Ellendorf is in favour of a better understanding of production systems, their efficiency in the market conditions while also considering their sustainability, their respective possible progress and their impact on food consumption and environmental values. This view calls for programmes that are less oriented to biotechnology and for a more stimulating partnership between scientists of various disciplines. For the new countries, Emil Ervajec considers there is a need to reinforce their research for a better balance with that of the old Western countries. Klaus Meyn points out another gap to be filled between the new European rules and their scientific basis, for instance in the field of environment and animal welfare.