The impact of high energy prices on the agricultural sector and rural areas

Key points:

In the opinion, the EESC:

  1. suggests enhancing the Common Agricultural Policy (CAP) after 2027. This involves integrating counter-cyclical elements, aligning CAP instruments with rapidly changing market conditions, and advocating for improved risk management tools in National CAP Strategic Plans.
  2. proposes the standardization of contract laws and practices across the food supply chain. This initiative aims to ensure consistency and efficiency among EU Member States, with contracts reflecting the dynamic production costs in primary agriculture.
  3. underscores the crucial role of local and regional energy communities in facilitating a just and effective energy transition in rural areas. The committee recommends acknowledging and supporting these communities, especially those dedicated to renewable energy sources, to contribute to rural development and resilience.

Section:

Section for Agriculture, Rural Development and the Environment (NAT)

Rapporteur:  Simo TIAINEN ( Civil Society Organisation's ,GR III / Filand)

Own initiative-opinion

Context:

The EU faced an energy crisis due to Russia's unprovoked war against Ukraine, causing a surge in energy prices since autumn 2021. This escalation significantly impacted the agricultural sector and rural areas, raising production costs, creating market uncertainty, and straining the financial stability of farmers. Seasonal energy consumption in agriculture complicates adjustments to price increases, affecting irrigation and machinery operations. In rural areas, high energy prices increased costs for heating, electricity, logistics, and transportation, particularly burdening those with limited access to energy infrastructure. This situation heightened the risk of social exclusion, energy poverty, and operational challenges for rural businesses, exacerbating the threat of rural poverty. The energy market turmoil has contributed to EU-wide inflation, with a substantial increase in the consumer price index for electricity, gas, and fuels. In agriculture, energy prices rose by 86% within two years. This opinion seeks to delve into the impact of high energy prices on agriculture and rural areas, offering recommendations to mitigate negative consequences.

Date of the section meeting: 24 November 2023

Results of the section meeting vote: 48 votes in favour, none against and no abstention

Date of adoption at the EESC plenary session:  14 December 2023

Results of the plenary session vote: 182 in favour, none against, 2 abstentions

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