Agribusiness | IEG Policy Food & Agriculture Outlook 2020 Contents
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Agribusiness | IEG Policy Food & Agriculture Outlook 2020 Contents 3 Welcome to our Food & Agriculture Outlook for 2020 US FOOD POLICY ❱ 4 Increased enforcement, produce safety expected to dominate FSMA in 2020 7 All eyes on FDA as food and supplement makers await regulatory pathway for CBD 10 FDA to implement updated Nutrition Facts, define ‘healthy,’ tackle ‘natural’ EUROPEAN FOOD POLICY ❱ 13 Airbus tariffs on agri-food products: a new chapter in EU-US trade disputes 16 Food labelling under pressure 19 A busy year for novel foods US AGRICULTURE POLICY ❱ 22 EPA’s moves continue to be a focus for biofuels sector 25 Hazy outlook for hemp in 2020 28 The elections and what lies ahead EUROPEAN AGRICULTURE POLICY ❱ 32 Under pressure, but still fighting: The World Trade Organization and global farm trade 35 How the glyphosate debate is shaping agrifood policy and practice 38 Post-2021 Common Agricultural Policy: Towards further delays in the reform process? 41 New European Commission banks early success on its Green Deal 44 EU-Mercosur deal to fuel further debate about sustainable trade Editor: US Food Policy Analyst: US Food Policy Consultant: European Agricultural Policy Joan Murphy JR Pegg Chris Horseman (contributor) Email: [email protected] Email: [email protected] Editor: European Food Law Analyst: US Food Policy Analyst: European Food Law Peter Rixon Margarita Raycheva Sara Lewis (contributor) Email: [email protected] Email: [email protected] Analyst: US Agricultural Policy Analyst: US Agricultural Policy Roger Bernard Richard Morrison Subscription & Marketing Enquiries Email: [email protected] Email: [email protected] Email: [email protected] Agribusiness Intelligence Customer Success Team EMEA: +44 20 38 55 38 90 Analyst: European Agricultural Policy Analyst: European Agricultural Policy APAC: +852 37 26 70 59 Pieter Devuyst Steve Gillman AMERICAS: +1 64 66 79 30 70 (New York)/ Email: [email protected] Email: [email protected] +1 65 14 44 71 10 (Minneapolis) Email: [email protected] IHS Markit | Agribusiness | Ropemaker Place | 25 Ropemaker Street | London EC2Y 9LY | UK | Telephone: +44 20 72 60 20 00 www.agribusinessintelligence.com Any unauthorized use, disclosure, reproduction, or dissemination, in full or in part, in any media or by any means, without the prior written permission of IHS Markit or any of its affiliates (“IHS Markit”) is strictly prohibited. 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All rights reserved and all intellectual property rights are retained by IHS Markit. 2 / Food & Agriculture Outlook 2020 | IEG Policy | Agribusiness | IHS Markit www.agribusinessintelligence.com Welcome to our Food & Agriculture Outlook for 2020 Europe has been embattled by trade disputes that will continue to be felt throughout 2020, whilst CAP negotiations continue and more member states work out how to rid their systems of glyphosate. The Airbus subsidy dispute shook up the European agrifood sector in 2019 and the after-effects will be felt throughout 2020. The WTO gave the green light in April 2019 to the US to impose retaliatory tariffs on the EU over the awarding by the Europeans of subsidies to Airbus, which had upset US competitors such as Boeing. The US administration began imposing an additional 25% tariffs on a wide range of EU agri-food imports soon after the WTO ruling. The US and the EU are likely to enter further into trade disputes in 2020 as the US has taken exception to France’s digital services tax and threatened, at the end of 2019, to impose additional tariffs on agrifood produce from France. Negotiations around the reform of the Common Agricultural Policy (CAP) will continue throughout 2020, probably further facing delays with uncertainty around Brexit and stalled budget negotiations stalling the timetable. Meanwhile, the Commission has introduced a new growth strategy, called the Green Deal, with a special focus on sustainability. Food labelling will continue to be an important development to watch in Europe throughout 2020 as companies look at different ways of providing the information other than through traditional labels on the products themselves. An exciting year is also expected for novel foods, particularly in the field of cannabidiol products, insects and laboratory produced meat. Manufacturers of glyphosate-based products can only expect an ever greater movement against the herbicide with member states lining up to ban the product through phases over the coming years. US regulators will need to wrestle with hemp and cannabis regulation, new labeling rules that come into play this year and the aftermath of leafy greens outbreaks – all with the backdrop of the Trump administration’s aggressive trade stance and a very light hand when it comes to new regulations in the run-up to a presidential election. Expect increasing enforcement of the Food Safety Modernization Act after FDA allowed a phase-in of some of the requirements for US and foreign suppliers. And all eyes will be on the produce industry as it struggles to prevent future romaine outbreaks in California and Arizona, while FDA continues tinkering with ag water standards. USDA did roll out the much-anticipated hemp rule under the 2018 Farm Bill, but it did not quell concerns from those who think the testing and sampling protocols are too stringent. And will there be a legal pathway for cannabis as an ingredient in food and supplements? Another agency has said it will need three-to- five years to write that regulation, much to the dismay of industry and vocal supporters in Congress who are anxious for a legal pathway. Legislation may force the government’s hand. Finally, the food industry will be eager for some regulations this year, particularly ones on labeling that define “healthy” and perhaps even “natural.” The dairy industry is hoping 2020 will be the year FDA takes a stand on the rising number of plant-based dairy companies using dairy terms on labels. Of course, the looming presidential elections will play a supporting role in Washington, DC. this year, whether in forging a partisan agenda in Congress, debating a biofuel policy, or as the Trump administration courts the farm vote. www.agribusinessintelligence.com IHS Markit | Agribusiness | IEG Policy | Food & Agriculture Outlook 2020 / 3 US FOOD POLICY ❱ Increased enforcement, produce safety expected to dominate FSMA in 2020 by Joan Murphy With the Food Safety Modernization Act (FSMA) rules largely in place, FDA has left for 2020 other decisions and experts predict companies will see FDA’s generous “educate before regulate” mantra transition to full-blown enforcement. 4 / Food & Agriculture Outlook 2020 | IEG Policy | Agribusiness | IHS Markit www.agribusinessintelligence.com In 2019, FDA rolled out the FSMA One signal of that change came when FDA While shifts in Intentional Adulteration program and created an import alert to detain human released the much-delayed laboratory and animal foods that do not comply with enforcement priorities accreditation proposal for food testing. FSVP, which requires importers to perform may not reach the front On the to-do list for 2020, the agency still risk-based supplier verification activities. page, the produce industry needs to tackle the FSMA farm definition While only one company is named on the and clarify written assurances in the import alert’s red list, FDA is likely to target is in the unenviable supply chain to give the regulatory more companies that fail to make any position of struggling to community more transparency of what effort to comply with the regulations, contain the damage from to expect. he said. the rolling romaine lettuce But two issues garner the most attention FDA also delivered the first warning letter recalls and outbreaks... from experts: FDA’s anticipated move to in July to a tahini importer for not ramp up enforcement of FSMA and the complying with FSVP as a result of a vexing outbreaks caused by E. coli on Salmonella outbreak that led to an FSVP romaine lettuce. inspection. Companies are being forced to 2022 at the earliest after industry questioned look back through the entire supply chain the practicality of FDA’s approach. An FDA official said the “educate before you to make sure they comply and do not regulate” approach can be credited for the become targets of class action lawsuits, The produce industry has named task high FSMA compliance rates when Levy said.