Pesticide regulation may make wheat price soar

Wheat prices could rise by almost a third, causing the price of a loaf to soar to record highs, if new EU proposals to restrict pesticide use are approved, millers have warned.

Their warning came as the Food and Drink Federation (FDF) and other food trade associations called for an EU-wide economic impact assessment of the new pesticides regulation before it makes any further progress through the European Parliament.

Alex Waugh, director general of flour millers’ association NABIM, said that in the absence of proper impact assessments many manufacturers had been ‘caught on the hop’ by the proposed legislation, and were now desperately lobbying to prevent it from being rushed through the Parliament.

Waugh said: “We’re talking about crop yield reductions of 24-29% on wheat, and yet half of the other Member States, who will be affected by this just as much as UK farmers, do not seemed to have cottoned on to the seriousness of the situation.”

He added: “All of the key fungicides used in wheat production such as Strobilurin and Triazole will be caught up by this legislation and there just aren’t any decent alternatives at the moment.”

Trade policy manager Martin Savage added: “Of course, there is organic wheat production, but the yields are far lower than conventional agriculture and they rely on spring-grown crops, which is why most organic wheat is imported.”

He added: “I think some Member States have been under the false impression that there would be a series of derogations in this legislation, but that is not our understanding.”

Dominic Dyer, chief executive of the Crop Protection Association, added: “While the UK, Polish and Irish governments have had major problems with these proposals from an early stage, I think some of the other Member States have not really connected the dots yet. It’s all very well for the Commission to say we’re overplaying the risks, but they haven’t done the EU-wide assessments to prove that we are not. The French want to get this through its second reading in the European Parliament by the end of the year, and there is a real risk that something is going to be rushed through without proper scrutiny.”

He added: “We know that prime minister Gordon Brown understands the issues on this, but we are not sure that [French president Nicolas] Sarkozy does. Basically, we feel that the Commission and the Council have not done their job properly on this, and the food chain as a whole has to say: ‘hang on a minute’.”

In July 2006, the European Commission proposed a new regulation concerning the placement of pesticides on the market, including “cut-off” criteria that would ban the use of many active ingredients based on whether a substance was regarded as hazardous rather than whether it posed a risk under realistic conditions of use. According to the UK government’s Pesticides Safety Directorate (PSD), this could lead to a 20-30% drop in yields of most arable crops and an inability to grow some fruits and vegetables.

However, worse was to come in October 2007, when the European Parliament introduced more stringent cut-off criteria, which the PSD predicted would have truly catastrophic effects on yields.

A common position struck by the Council of Ministers in late June 2008 in turn rejected most of the Parliament’s amendments, taking the proposal back to something closer to the original draft.

Most observers now expect that some kind of compromise will have to be struck between the two positions when the proposal goes through its second reading in the Parliament, said Dyer: “Even if some of the worst amendments proposed by the Parliament don’t get through, we’re looking at major reductions in crop yields across a wide range of crops at a time when food prices are already at record highs.”

The FDF said: “The FDF strongly recommends that the current proposals are amended in the light of a full, EU-wide, impact assessment to avoid unforeseen and adverse implications for agricultural raw material safety, quality and supply and further unnecessary increases in food prices for consumers.”

It added: “Lobbying of MEPs, the Commission and other Member States is FDF’s priority.”