The future of the agri-environmental nexus in Europe

The elections for the European Parliament last weekend raise doubts about the consolidation of the climate agenda on the continent. Always so present, to the point of constituting a specific political spectrum — “the Greens” — and expressed in the ambitious European Green Deal, it may shrink due to the new political configuration. The political and economic liberal center, which maintained the majority of seats, has argued in favor of parsimony in environmental regulations. This position is illustrated by the recent active participation of the president of the European Commission — the executive arm of the bloc —, Ursula von der Leyen, considered center-right, in the relaxation of environmental rules imposed on farmers in the bloc. When the protests by rural producers intensified, she came out in defense of an expanded dialogue with the sector to reconcile the objectives of green policies and the demands of the protesters. The discontent of farmers, expressed in the several tractor incursions on the streets of the continent since 2022, favored the result of the elections towards the agendas defended by politicians more to the right.

Insper Agro Global conducted a detailed assessment of the various aspects that shaped the movement of the European production sector. Environmental requirements considered excessive, stagnation in productivity, excessive bureaucracy, geopolitics, war and loss of competitiveness formed a broth that calls into question Europe's ability to articulate strategies that aim at more sustainable agricultural production. The report “Times of crisis: an analysis of agricultural protests in Europe” addresses the environmental requirements of the Green Deal and its Farm do Fork strategy, in addition to the Common Agricultural Policy (CAP), drawing a parallel with the evolution of agricultural productivity in the bloc’s countries.

Subsidies have always been a significant part of EU agricultural policy, with the aim of ensuring stability and competitiveness, albeit artificial, in the sector. However, an analysis of recent developments in agricultural productivity for the bloc’s main products reveals that the results have not been successful. The study offers several explanations for this, such as excessive environmental restrictions, difficulties in adopting new technologies and a lack of incentives for innovation.

The paper also relates the Russian invasion of Ukraine and how its consequences further inflamed the movement that culminated in the achievement of a relaxation of environmental obligations. And if this movement has already precipitated a difficulty for the EU in maintaining its environmental ambition, the reduction of the most environmentalist bench may jeopardize a stable and more consensual political situation for the approval of regulations in this regard. In this line, the agreement with Mercosur, which had already been rejected due to pressure from French farmers, is also likely to face more resistance with the election of nationalist MEPs.

From the point of view of the agro-environmental nexus, the question that remains is: is this new configuration of the European Parliament an opportunity to improve the reconciliation between competitiveness and sustainability in the European agricultural sector or an environmental risk? From the Brazilian point of view, could this mean less environmental pressure on agricultural imports or greater protectionism guided by a nationalist bias of the advancing bench?

The study, conducted by researchers Lorena Liz Giusti e Santos and Paulo Henrique Carrer Ribeiro under the supervision of Camila Dias de Sá and Leandro Gilio, provides support for a better understanding of the challenges and opportunities for navigating this complex scenario. Brazil needs to be aware of the developments of the new political arrangement and be prepared to adapt its strategies to new market demands.

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