The EU pre-emptive ban on pesticides harms world trade

Increasing yields

In the next few weeks, the members of the EU, representing a market of some 400 million people, will vote to ban a lengthy list of agricultural pesticides and fertilisers. They will also move from a risk-based method of evaluation to one based on an estimation of hazard.

Under a risk-based system, chemicals are tested on animals to evaluate the potential harm that such chemicals may cause humans. The products are diluted to a particular level and then fed to lab rats which are then monitored for ill-health. If the dilution at which the product becomes toxic falls below a certain threshold (set by law, rather than science) then the product is considered safe for general use.

Those of you worried about this approach should consider that this is the way thresholds for sugar, salt, coffee, tea, alcohol and other things you regularly consume are also set. Food without salt can taste quite horrid, and too little or too much salt will cause you harm.

Obviously, there is a trade off.

If we don’t use pesticides or fertilisers at all, then crop yields drop and the cost of food rises. Compare the price of your organically grown veg with more modern approaches to see the impact this has.

A hazard-based approach will declare that any product that has the potential to cause harm – even if such potential hasn’t actually been proven – will result in the banning of the chemical and any products on which it has been used. Chemical companies, as well as farmers, are extremely frustrated by this ruling as it will reduce the variety of chemicals they can use. Such reduction also increases the risk that insects and parasites will develop immunities to the chemicals that are left.

Organic farmers have celebrated the news, but they make up a very small proportion of overall supply. Once the law is enacted, European farmers will have three years to find alternative products, but consumers are likely to feel the impact of price increases almost immediately.

The worst impact, though, will be felt by producers outside of Europe. Farmers and producers in emerging countries are going to be particularly hard hit. Africa is an especially difficult place to farm, with difficult soils and hardy pests.

The result will be felt around the world. Emerging market producers of everything from cut flowers, to cotton, as well as to products we actually eat, will have to settle for lower yields or more expensive chemicals. Since agricultural products are commodities with prices set internationally, price rises will affect the poorest outside of Europe as well.

On the other hand, there may be opportunities. European farmers will be under greater pressure than outsiders, since crop-spraying and other chemical distribution systems that may impact on water-tables or nearby non-agricultural areas are being banned. These aren’t problems that will affect outsiders and so Europe may actually come to rely on more imports than before.

The reliance on less pesticides or fertiliser may also give a tremendous boost to genetically-modified products which are designed to require less of both. True, Europeans are dead against GM as well, but price is going to start coming in to this at some stage.

During the boom times, people were happy to spend more on Fair-trade, locally produced, organically grown and “karma” free foods. With salaries dropping, unemployment rising, and financial enthusiasm popped, all those expensive designer food allergies are becoming unaffordable.

The only retailers around the world who are thriving on the current credit crisis are the value brands. Cheap and equally healthy mass-produced veggies and meals are popular again.

400 million Europeans are thrusting their beliefs about food safety on the rest of us. The best we can hope for is that, once they are presented with the bill, they decide to go back to see sense and adopt cheaper options.