Many operators in the EU’s agri-food sector are struggling to maintain business in the face of rapidly rising input costs and extreme weather events, according to agri-food chain associations Copa-Cogeca, the Primary Food Processors (PFP) and FoodDrinkEurope.
In a statement, the associations said a combination of problems meant more and more companies in the EU agri-food chain are struggling to maintain their operations, with some companies faced with the choice of stopping production, laying off staff or going out of business.
“Over the past year, the European agri-food sector’s production costs have increased dramatically,” said the organisations’ statement. “Natural gas, electricity, fertilisers, transport fuel, packaging and external labour
have all risen. Cost increases were initially due to a post-Covid rebound in demand and supply chain constraints, but they have been severely exacerbated by the Russian invasion of Ukraine. These cost and inflationary pressures come in a context of extreme weather events – droughts, storms and frosts – that have already caused major impacts on the farming community and agri-food businesses.”
The latest increases in energy prices, especially natural gas and electricity, threaten the continuity of agri-food production cycles and therefore the ability to continue delivering essential agricultural commodities, food ingredient and products, and feed materials.
The agri-food chain backed the European Commission’s recent “Save Gas for a Safe Winter” Communication, which singles out the critical importance of Europe’s agri-food supply chain and the need for a secure supply of gas to maintain food security. However, Copa Cogeca said to continue operating and to maintain a fully functioning food supply chain, the sector needs certainty on the access to energy and stable prices and needed EU member states to intervene to bring energy prices down and increase liquidity on energy markets, diversify energy supply, boost sustainable energy generation, and support the competitiveness of operators.