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The study, based on the well-known CAPRI model, focuses on two sectors and three scenarios: a ban on farrowing crates for sows with an immediate transition by 2025 (Scenario A), a transition by 2035 (Scenario B), and a transition by 2045 (Scenario C).
Decreased production
The conclusions presented show that pig production will decrease between 23.6% to 8.4-0.5% depending on the scenario considered. The transition to free farrowing systems will require significant investments in new barns and in the remodeling of existing ones. Depending on what farmers decide, investment costs could range from 2.1 to 3.5 billion euros.
Production will have an impact on the EU trade balance
In most scenarios, domestic market demand does not decrease in proportion to the drop in production, leading to a very strong increase in imports in all scenarios (between 1086% and 43.7%). Conversely, EU27 exports decrease sharply.
Researchers find another major problem is likely to arise: the farmers making these transitions will not benefit from market premiums for their products since the entire industry is following the same path. As this study confirms, the shift to alternative housing systems will eventually erode the revenue generated and expedite the trend of rising imports under the current trade framework. When considering a phasing out by 2025, the average producer price for pork surges by 47.4% in the EU-27. When a 10-year or 20-year long transition period is granted, the rise in the producer price for pork becomes much smaller and leads to more moderate shocks for consumers.
Concentration of production
Another key finding of the study, the phasing out of crates will most certainly intensify the concentration of production with bigger facilities being able to invest in the transition. In the same direction, the study also identifies a clear risk of increasing disparities within the internal single market. Regardless of the length of the transition period, the phasing out of crates will have a lasting dividing effect on the economic performance in western and eastern Europe.
Pig production will be relocated, and as identified in the existing Farm to Fork impact assessment, this relocation will lead to carbon leakages as well as an impact on biodiversity and animal welfare in countries unaligned with our production standards.
May 31, 2023/ COPA-COGECA/ Press release.
https://copa-cogeca.eu/
