1. Market perspectives UE market for sustainable food Cesare Zanasi - Bologna University SALSA Project Sustainability meeting Mexico city 14 November 2013

2. Latin America beef exports to EU

3. Latin America export to EU Latin America: 2013 + 20% respect to 2012 Breakdown by country Brazil + 37% shipment of beef first quarter 2013 : Causes: Brazilian Real devaluated against Euro – increase in supply Uruguay : first quarter 2013 + 30% Shipments of Uruguayan beef to the EU. Increased product differentiation (Certified Natural Meat Program of Uruguay)Certified Natural Meat Program of Uruguay Argentina : reduced Argentinian export in the first quarter(-18% shipment of beef). Government policy (high export taxes); reduced supply : substitution with soybean closure of many export plants

4. Mexico EXPORT of Beef NO EU

5. Demand for sustainable beef Not directly measurable since a “sustainable beef” definition does not exist Anyway in EU organic beef or other certified beef is still a very small niche

6. Driving forces Demand for imported sustainable food Consumers The importers EU trade regulation Tariffs – quotas – Sanitary and Phytosanitary barriers Media/civil society Organizations (NGOs) Investors Voluntary schemes Organic – Fair trade – SAN… Retailers/processors

7. Key challenges influencing EU supply and import decisions Demand for imported meat - EU iii) Food Safety: Recognize & implement high standards across the world ii) Cost of production: the key challenge of the European meat sector iv) Animal welfare: a global responsibility – Alignment with OIE needs to be a priority i) Dependency on beef import from third countries to increase SourceSource: World Trade Organization, 2008 pp.42-43

8. Demand for imported meat v) Animal Transport: Enormous efforts made as cost of production skyrocket on animal transport; all the requirements that operators have to fulfill ….. lead to a considerable increase in the cost of production vi) No feed import – no livestock – no competitive EU meat industry in the future SourceSource: World Trade Organization, 2008 pp.42-43

9. The Import Scenario EU IMPORT MANAGEMENT

10. IMPORT IN EU EU Tariff Barriers: duties EU REGULATIONS AFFECTING BEEF IMPORT

11. EU Barriers: import licensesimport licenses Imports of some agricultural products must be accompanied by an import licence. Allow the EU authorities to monitor trade flows and administer tariff quotas and safeguard measures. EU REGULATIONS AFFECTING BEEF IMPORT

12. Demand for imported meat EU Quotas The EU Commission may provide import tariff quotas HILTON grass fed beef quota Hormone-treated beef ban Quota Import Tariff Quota for Grain Fed High Quality Beef GATT Frozen beef quota etc.. Specifically limits on the volume of goods which may be imported with a reduced customs duty.

13. Demand for imported meat Safeguard measures Exceptional market support applied to beef and veal, milk and milk products, pigmeat, sheepmeat and goat meat, eggs and poultry meat Related to or consequent upon health and veterinary measures adopted in order to combat the spread of disease. Or to avoid serious disruption on the markets concerned.

14. EU policies regarding SPS requirements, food safety and agricultural product quality standards Animal welfare and animal production methods could well gain increasing prominence in the coming years, with potentially important consequences for trade flows. SPS requirements Environmental requirements EU Regulations mostly related to Beef sustainability

15. EU and Mexico and other Lat. Am. regulations compliance to Sustainability SALSA Results Lack of regulation on sustainability issues A greater focus on food safety, traceability and quality Almost all legal regulations showed a very low association with environmental, social and economic issues Only very few regulations (e.g. Mexican Regulation for Sustainable Rural Development) jointly consider the environmental social economic aspects. Most of the regulations are associated with food safety, especially in countries such as Brazil and Mexico Food traceability issues showed high values in Brazil and in the EU Legal regulations for Mexico focused most on food quality issues

16. EU food Sustainability future strategy 1.Better technical knowledge on the environmental impacts of food 2.Stimulating sustainable food production 3.Promoting sustainable food consumption 4.Reducing food waste and losses 5.Improving food policy coherence Towards a more resource efficient and sustainable food system Proposed areas for action presented for discussion:

17. EU food Sustainability future strategy Source: DG Agriculture and Rural Development. The CAP post-2013: From challenges to reform objectives

18. EU food Sustainability future strategy Source: DG Agriculture and Rural Development. The new greening architecture of the CAP

19. EU International Role It is in the interest of the EU, to act in favor of a global equitable governance of resources and of food exchanges, preserving both global availability of food and local access to food WHY? because of its dependence on external mineral resources, its position as a major player in the global food markets (both as importer and exporter) identify coalitions for a better multilateral governance with all countries, and particularly with emerging countries better analyze the consequences of domestic European policies on food security and the environment in the rest of the world HOW?

20. Demand for imported meat Private StandardsPrivate Standards vs Regulations Private standards also play a large role, in that they are going beyond national legislation and are placing increased and in part undue pressure on suppliers. Credibility in governmental and WTO rules needs to be restored in order to arrest the multiplication of these expensive private standards, however these standards remain difficult to control and bring under legislation. SourceSource: World Trade Organization, 2008 p.44 https://mc9.wto.org/official-documents-bali-ministerial

21. Private StandardsPrivate Standards compliance to Sustainability dimensions SALSA Results Most of the private standards regulate environmental aspects as well as social issue. A majority of private standards have higher n. of requirements for food quality, traceability and food safety than the legal regulations examined. Most of the private standards are based on the legal regulations and integrate legal food safety and traceability requirements.

22. Private StandardsPrivate Standards compliance to SAFASAFA Sustainability dimensions SALSA Results

23. EU Animal Protection strategy and its impact on third countries Prof. Leonardo Nanni Costa

24. Potential for expansion of environmentally and ethically oriented food quality standards in EU and Latin America CONSEQUENCES Opportunities

25. Little room for the export of sustainable beef in EU at the moment Potential to be exploited by Improving a Country level strategy for valorizing the quality of Beef according to the main players and Regulations’ expectations Exploiting the internal market for sustainable products to build dimensions of scale able to support sustainability implementation Building regional alliances and advocate for a global sustainability governance

26. Big Players’ increasingly dominant role or chance for a mainstream sustainability implementation? Sainsbury’s: “a sustainable supply chain is not just about sourcing with integrity, it’s about actively working with suppliers to educate them” “Unilever has invested heavily in improving farming practices among tea farmers, building capacity to more than 170,000 tonnes of Rainforest Alliance certified tea for brands such as Liptons. Source: How to commercialise a sustainable supply chain By Claire Manuel

27. McdonaldsMcdonalds: There is no definition of what sustainable beef is “With some products [like beef], there’s not even a definition for what sustainable is. We want to use our size and influence to work with the industry and NGOs to come up with definitions of sustainable beef. …….What I mean by that is that there are no standards, measures, accountability and traceability to make those claims today.” Big Players’ increasingly dominant role or chance for a mainstream sustainability implementation?

28. WALLMART and the Sustainability Consortium Big Players’ increasingly dominant role or chance for a mainstream sustainability implementation?

29. Conclusions Consumers and civil society pressure Investors’ pressure Sustainability as an opportunity Sustainability difficult to manage Big Players involvement in sustainability EU role (not fully Developed) Latin American Sustainable development

30. THANKS!