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IFCN Dairy Conference
June 2015
KIEL
Centro Ricerche Produzioni Animali – C.R.P.A. S.p.A.
Assessing farmers’ cost of compliance with
legislation in the fields of environment, animal
welfare and food safety
Alberto Menghi, Dorothee Bölling
Research Centre for Animal Production
(CRPA) Reggio Emilia, Italy
IFCN DRC
Assessing farmers’
cost of compliance
June 2015 KIEL
Contents
• Objectives
• Legislation analysed
• Methodology
• Results
Assessing farmers’
cost of compliance
June 2015 KIEL
1. To provide a comprehensive description and assessment of the costs of
compliance with EU legislation in the fields of environment, animal welfare
and food safety at farm level in selected EU Member States;
2. To provide a comprehensive description and assessment of the costs of
compliance for farmers in a number of third countries with equivalent
legislation in their respective countries, as well as with EU legislation as
exporters to the EU;
3. To compare the costs of compliance with environmental, animal welfare
and food safety legislation for EU and third country farmers and to draw
conclusions with respect to the impact on competitiveness.
Objectives
Assessing farmers’
cost of compliance
June 2015 KIEL
Countries case studies dairy beef Sheep
meat pork
broiler
meat wheat apple
grape
wine
European Union
Bulgaria 1 x
Denmark 2 x x
Finland 1 x
France 4 x x x x
Germany 5 x x x x x
Hungary 1 x
Ireland 1 x
Italy 4 x x x x
Poland 2 x x
Netherlands 2 x x
Spain 1 x
United Kingdom 3 x x x
Total 27 5 3 2 3 4 2 4
Third Countries
Argentina 2 x x
Australia 2 x x
Brazil 3 x x x
Canada 1 x
Chile 1 x
New Zealand 2 x x
South Africa 2 x x
Thailand 1 x
Ukraine 1 x
USA 1 x
Total 16 2 2 2 2 2 2 2
22 Countries and 8 sectors investigated
in the study
12
EU
10 NON
EU
Assessing farmers’
cost of compliance
June 2015 KIEL
Project partners
CRPA - Centro Ricerche Produzioni Animali
Thunen Institut IFCN
Charles Sturt University Kasetsart University
CRPV LFL - Bavarian State Research Center for Agriculture
DLV Plant Massey University
Embrapa- Empresa Brasilera de pesquisa Agropecuaria
MTT - Agrifood Research Finland
Escola Superior de Agricultura "Luiz de Queiroz" Nika Consulting
FNEA Patriotisk Selskab
Fundación para el Desarrollo Frutícola Sabora
Ghent University Schoney Consultants
Hungarian Institute of sociology (MTATK) Stellenbosch University
AHDB - Agriculture and Horticulture
Development Board Stringer Drewey Consulting
INRA SupAgro University of Cambridge
Institute d'Elevage Videncenter for Svineproduktion
Irish Agriculture and Food Development Authority West Pomeraniana University of technology
ITAVI - Institut Technique de l'AVIculture
Assessing farmers’
cost of compliance
June 2015 KIEL
Methodology: the typical farm approach
A typical farm is a model farm ….and a tool, representing the most common
farm type for a specific product in a specific country or region. The
necessary technical and economic data to define the typical farm were
established by farmers and local experts. This method was used since
many years by Researchers networks such as Agribenchmark (TI) and
IFCN
The number of typical farms selected per country varies from 1 to 3. In
countries with different production systems
To analyse and compare the costs of compliance in 22 countries, a total of
74 typical farms have been defined (45 in EU Member States and 29 in
third countries).
The typical farms are fully comparable worldwide due to standard rules. Still,
even with a high number of typical farms it is difficult to draw statistically
significant conclusions.
Assessing farmers’
cost of compliance
June 2015 KIEL
Selected legislation
The selected legislation concerns environment, animal welfare, and food
safety and animal health. Regulations and directives that could generate
compliance costs for farmers have been selected by the Steering
Committee and country experts.
The selection process resulted in a group of 40 EU directives and
regulations, as well as the Good Agricultural and Environmental
Conditions (GAECs) as laid down in Council Regulation (EC) N. 73/2009
of 19 January 2009 which directly affect farmers in the EU. Regulations
relevant to the feed industry were included in order to consider indirect
effects on farmers.
For the third countries, legislation which was selected was equivalent or
similar to the selected EU legislation. In addition, private standards have
been considered if they are compulsory and constitute a precondition for
export into the EU.
Assessing farmers’
cost of compliance
June 2015 KIEL
The Logical diagrams: Nitrate Directive
Benefits for farmers
Savings in inputs/ labour
Investment support
Additional revenues
Subsidies
Extension/education programmes
financed with public funds
Assessing farmers’
cost of compliance
June 2015 KIEL
Costs of compliance:
The methodological scheme
Base scenario (2010)
Typical farm approach
1) Selection phase
Relevant region/s
Relevant farm size
Relevant production system
Relevant management performance
2) Data collection
Advisors and farmers involvement
Typical farm data collection
3) Elaboration phase
Data input in the calculation tools
Data elaboration
Feedback from advisors and farmers
Final results
-/+
With/without scenario
Panel process
1) Selection phase
Relevant legislation identification
2) Panel discussion
Identify farm strategies according to the
logical diagrams
Discussion on the With/without scenarios
Identify costs items affected
Quantify costs items
3) Elaboration phase
Data input in the calculation tools
Data elaboration
Feedback from advisors and farmers
Preliminary results
4) Fine tuning
Feedback from the Project Team and from
the Steering Group
Final results
Assessing farmers’
cost of compliance
June 2015 KIEL
RESULTS
BEEF
Assessing farmers’
cost of compliance
June 2015 KIEL
Costs and prices in 2010
0
100
200
300
400
500
600
700
FR70 IT910 UK45 UK750 AR600 AR40K BR600 BR600B BR1550
€/1
00
kg
carc
ass
we
igh
t
non-factor cost land cost labour cost capital cost total revenuesbeef price
Assessing farmers’
cost of compliance
June 2015 KIEL
Costs of compliance on total costs in %
Assessing farmers’
cost of compliance
June 2015 KIEL
RESULTS
SHEEP MEAT
Assessing farmers’
cost of compliance
June 2015 KIEL
Costs and prices in 2010
0
50
100
150
200
250
300
350
400
FR470S FR860S UK400S UK500S AU2000S AU3000S NZ3200S
€/1
00
kg
carc
ass
we
igh
t
non-factor cost land cost labour cost capital cost total revenuesSheep meat price
Assessing farmers’
cost of compliance
June 2015 KIEL
Costs of compliance on total costs in %
Assessing farmers’
cost of compliance
June 2015 KIEL
RESULTS
PORK
Assessing farmers’
cost of compliance
June 2015 KIEL
Costs and prices in 2010
0,00
50,00
100,00
150,00
200,00
DK614 DE187 NL369 PL50 BR500+750 USA3200
€/1
00
kg
slau
ghte
r w
eig
ht
non-factor cost land cost labour cost capital cost pork meat price
Assessing farmers’
cost of compliance
June 2015 KIEL
Costs of compliance on total costs in %
Assessing farmers’
cost of compliance
June 2015 KIEL
RESULTS
BROILER MEAT
Assessing farmers’
cost of compliance
June 2015 KIEL
Costs and prices in 2010
0
20
40
60
80
100
120
FR40k BRET FR40kPDL DE40kN DE30kS IT187kER BR16kD BR28kEX TH60k
€ c
en
t/kg
non-factor cost land cost labour cost capital cost poultry meat price
Assessing farmers’
cost of compliance
June 2015 KIEL
Costs of compliance on total costs in %
Assessing farmers’
cost of compliance
June 2015 KIEL
RESULTS
WHEAT
Assessing farmers’
cost of compliance
June 2015 KIEL
Costs and prices in 2010
0
50
100
150
200
250
300
DK700FYN DK1200SL DE120HI DE1100MVP HU1100TC UK400SUFF CA1700SAS CA6000SAS UA2600WU UA1500SU
€/t
on
non-factor cost land cost labour cost capital cost wheat price
Assessing farmers’
cost of compliance
June 2015 KIEL
Costs of compliance on total costs in %
Assessing farmers’
cost of compliance
June 2015 KIEL
RESULTS
APPLES
Assessing farmers’
cost of compliance
June 2015 KIEL
Costs and prices in 2010 (€/t)
0
100
200
300
400
500
600
DE21 DE15 DE40 IT5 IT2.5 CL25 CL80 ZA80 ZA120
non-factor cost land cost labour cost capital cost total revenuesapples price
Assessing farmers’
cost of compliance
June 2015 KIEL
Costs of compliance on total costs in %
Assessing farmers’
cost of compliance
June 2015 KIEL
RESULTS
WINE GRAPES
Assessing farmers’
cost of compliance
June 2015 KIEL
Costs and prices in 2010 (€/t)
grapes price
Assessing farmers’
cost of compliance
June 2015 KIEL
Costs of compliance on total costs in %
Assessing farmers’
cost of compliance
June 2015 KIEL
Conclusions
Farmers’ costs of compliance with legislation in the field of environment,
animal welfare and food safety and animal health differs a lot between
countries and sectors.
Differences can be related to country system aspects such as the
legislation transposition or the national requirements (bureaucracy and
control systems) to implement the EU rules.
Food safety and animal health regulations affect the non-factor and labour
costs of farms structurally. Legislation in the field of environment and
animal welfare primarily affects capital costs, as these types of legislation
may require a change of production systems.
Assessing farmers’
cost of compliance
June 2015 KIEL
Conclusions
Pig and broiler farms are most affected by legislation in all three policy
fields. For them, compliance costs range between 5 and 10% of production
costs compared to a range of 2 to 3% for dairy, beef and sheep meat.
Crop farms producing wheat, wine grapes and apples are less affected by
legislation than animal farms. Their compliance costs range from 1 to 3.5%.
Assessing farmers’
cost of compliance
June 2015 KIEL
Grazie per l’attenzione
Contacts:
Alberto Menghi
+39-522-436999
