November 17, 2009

EU policies hurting European poultry industry

A spectrum of political decisions has caused many European poultry farmers to lose ground on the global market.

Prices of poultry meat fillets are too low and the feed costs are too high to provide a decent income for poultry growers, who could only wait for the barbecue season when prices for most parts will improve.

The loss of export markets and the rise of countries such as Brazil and Thailand, have further eroded Europe's market access worldwide. It did not help that Brazil, Thailand and even the US, had cheaper production costs, which gave them a cost and pricing advantage.

Production costs in Europe are high because of policies regarding food safety, animal welfare and environment protection, and more of such policies are expected to follow. As a result, EU poultry production costs are projected to increase further.

Adding to the problems is the EU's zero-tolerance policy, which does not tolerate even trace amounts of GMOs in feed grain imports, unless the GM variety in question has been approved. However, this makes a difficult situation as only a few GM crops have been authorised, and further authorisation usually comes painfully slow.

The EU relies on Argentina, Brazil and the US for some of its grain supply, but its slow approval process may cause grain exporters from South America to lose their interest and shift focus to markets that are less demanding where it concerns GM grains.

The result is that the EU will be forced to buy the more expensive grains or the leftover, which is unsustainable because the European poultry sector will no longer be able to supply enough meat from birds fed on non-GM feed ingredients.

This will lead to a situation where in order to meet demand, the EU will have to import poultry meat from poultry fed on feed containing GM grains that are not approved in the EU.

The worst case scenario drawn by the EU Commission also predicts a 44-percent drop in European poultry production by 2010, and the shortfall would have to be covered by imports from countries that use non-EU-approved GM feed for their chickens.