EU agricultural product promotional measures to be expanded
26 January 2014
The EC has announced plans to expand and refocus its “information and promotion policy for European agricultural and food products”. The budget is to be increased threefold (from €61 million to €200 million) with a stronger focus on external markets (i.e. funding support extended to externally oriented programmes will increase from the average of 30% of the total over the 2001–11 period). Externally focused programmes may receive up to 60% funding (up from 50%), with producer organisations now being allowed to directly benefit.
Annual priorities for funding will be set to ensure a more comprehensive approach, with funded activities “intended to act as key for opening up new markets”, particularly those covered by newly concluded EU trade agreements.
More products are also to be eligible for support including processed products (so-called non-annex I products). Programmes must, however, have a specific European dimension (i.e. they must be in line with the policy emphasis on safe products, produced according to high European quality standards). According to EU Agriculture Commissioner Dacian Cioloş, “the European agricultural and agri-food sector is well known for the unrivalled quality of its products and its compliance with standards that are unmatched anywhere else in the world.” Current exports are worth €110 billion per annum.
Programmes implemented under this policy aim to increase consumer awareness of the characteristics of EU products. The types of activities that can be supported include advertising campaigns, point of sale promotions, public relations campaigns, participation in exhibition and trade fairs and similar activities.
The EC is to provide increased technical support for activities targeting third-country markets, “for example by compiling business data on foreign markets”. A delegated executive agency is to be set up to manage the expanded programme, with the aim of increasing the EC’s expertise in this area.
A threefold justification for the expanded EU programme is advanced:
- The EU’s major commercial partners all extensively use promotional tools.
- There are new export opportunities in third countries arising as a result of shifting patterns of global demand (particularly with regard to Asia).
- New export opportunities are arising for EU agro-food exporters as a result of the conclusion of EU FTA agreements (with a current value for agro-food products of €35 billion but with scope for a significant increase).
This is considered to be “a strategic and pivotal opportunity for the European agri-food sector that should… be seized through an ambitious and innovative policy”.
The EU programme is in addition to national member states’ programmes for the promotion of agro-food sector products.
Editorial comment
In terms of the external dimension, the new expanded promotional measures programme can be considered an integral part of efforts to modernise CAP policy tools. It should be viewed in the context of the growing focus of EU agricultural policy on value-added and quality-differentiated product exports, and the decision taken in 2013 to set at zero all export refund payments.
With the exception of South Africa (and by implication the economic hinterland served by South African retailers and distributors), promotional measures in third countries are not directly targeting ACP markets. However, given the emphasis on exploiting new opportunities under FTA agreements, this could change.
It should be noted that South Africa, which is a target for a dedicated EU market access group (consisting of the EC, member states and private businesses represented in the target country), has increased in importance as a destination for EU agro-food sector exports since the conclusion of the EU–South Africa Trade, Development and Cooperation Agreement and the gradual dismantling of tariffs around the SACU market.
This being noted, the main impacts on ACP countries of EU promotional measures are likely to be felt in terms of increased competition on third-country markets, particularly in Asia and the USA, which must be factored into any specific market diversification efforts launched by individual ACP countries as they targeting quality-differentiated product markets.
More generally, the expansion of the EU programme highlights the importance of public-sector-financed promotional programmes in helping companies to take advantage of new opportunities arising from changing patterns of demand and the conclusion of new trade agreements.
