# EUR-Lex - 52012DC0079 - EN

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# 52012DC0079

**COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL on the European Innovation Partnership 'Agricultural Productivity and Sustainability' /* COM/2012/079 final */**

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1.
Introduction

In its Europe 2020 Strategy[1], the Commission underlines the
role of research and innovation as key elements in preparing the European Union
for future challenges. The orientations for “the CAP towards 2020”[2] highlight innovation as being
indispensable to preparing Union agriculture for the future. The "Budget
for Europe 2020"[3]
includes € 4.5 billion for research and innovation on food security, the
bio-economy, and sustainable agriculture.

This central role of research and
innovation is developed further in the EU 2020 flagship initiative
"Innovation Union"[4]
which introduces the concept of European Innovation Partnerships (EIP) as a new
way to foster innovation. A pilot EIP on 'Active and Healthy Ageing' has been
launched. Furthermore, preparatory work has been carried out to develop EIPs on
'Raw Materials', 'Water efficient Europe', and 'Agriculture'. EIPs pursue the
mission of building a bridge between science and the application of innovative
approaches in practice. The Council underlined the need for EIPs to have a
clear focus, as well as the importance of Member State involvement and effective
streamlining of existing instruments.

This Communication presents the conception
of the EIP 'Agricultural Productivity and Sustainability' referred to in the "Innovation
Union". The EIP follows the strategic orientations of "Europe
2020" and "The CAP towards 2020". It builds on consultations of
stakeholders, and it shall take up lessons learned from the pilot EIP on
'Active and Healthy Aging', including the development of its 'Strategic
Implementation Plan', as well as the discussions in the Council and needs and
ideas expressed by stakeholders.

2.
The Societal Challenges

World food demand is expected to increase
by 70% by 2050 (FAO). The dramatic increase in global food demand will be
accompanied by a steep increase in the demand for feed, fibre, biomass, and
biomaterial. This will inevitably trigger a supply reaction from Union's
agriculture which is one of the biggest suppliers to global agricultural
markets. Union agriculture accounts for 18% of world food exports, worth € 76
billion. In production values, Union agriculture provides more than 40% of
total food production in the OECD. Naturally, contributions to Union food
production vary between Member States and regions, given the major differences
in the economic and technological development of farming sectors.

During recent decades, agriculture has
experienced major productivity gains; however, this trend slowed down in
developed countries in recent years. These gains were achieved partly by putting
serious strains on natural resources and the environment. 45% of European soils
face problems of soil quality, evidenced by low levels of organic matter, and
almost one quarter suffer from moderate to high erosion. Valuable ecosystems,
and with them, valuable eco-system services have been damaged or have even
disappeared. Over the last 20 years farmland birds have declined by 20-25%, and
grassland butterflies by 70%, alongside with serious threats to pollinators
such as bees. Around 40% of agricultural land is vulnerable to nitrate
pollution, threatening water resources. Furthermore, agriculture accounts for
9% of the Union's greenhouse gas emissions.

Agriculture and forestry have made major
strides in terms of reconciling production with the need to manage natural
resources sustainably and to preserve the environment. However, these positive
developments may be undermined by the expected increase in agricultural output,
as a result of rising global demand. If this increase is delivered as per
current approaches, this will in turn further damage natural resources and the
environment.

These phenomena are not confined to the
technologically most advanced parts of Union's agriculture. Europe also has a
huge potential in areas characterised by small and traditional farms. However,
if those farms follow the established pattern of development, major
environmental damage will be inflicted on existing, often rich habitats and
biodiversity, and on soil functionality and water resources.

A shift towards a different growth path is
needed in order to establish a competitive and sustainable production of food,
feed, fibre, biomass and biomaterial. To achieve this, efficiency in supply
must be complemented by a reduction in the dramatic post-harvest losses. It
must likewise include adaptation to climate change and the wise use of
biodiversity and restoration of ecosystems and ecosystem services; it must
build upon the particularities of each territory and the potential offered by
genetic diversity so that we combine our rich genetic base with diverse
agricultural practices, new and old, and ensure better allocation and use of
our limited resources. Food chains are diverse and their specificities must be
integrated: "Long" supply chains involve aspects such as conservation
and storage, while "short" supply chains place the emphasis on the
local provision of food and particular quality attributes. Consumers must be at
the heart of all this, so as to steer production towards safe, high quality and
sustainably produced food.

The increase in output must go hand in hand
with improved economic viability for primary producers who have suffered a
declining share of value-added in the food chain over the past decade. Without
greater farm profitability, ecological sustainability will become even more
challenging.

Increased and sustainable agricultural
output will be achievable only with major research and innovation efforts at
all levels. Repeatedly, researchers and stakeholders have highlighted the gap
between the provision of research results and the application of innovative
approaches to farming practice. New approaches take too long to arrive on the
ground, and the needs of practical farming are not communicated sufficiently to
the scientific community. Thus, important innovations are not implemented on
the necessary scale, and relevant research fields do not always receive the
attention they require.

Increased productivity and competitiveness
of agriculture calls, first of all, for improved resource efficiency in order
to produce with less water, energy, fertilisers (especially phosphorus and
nitrogen), and pesticides. It requires also the increased use of renewable
energy sources and a reduction of waste, in line with the orientations given by
the 'Roadmap to a Resource efficient Europe'[5].
Sustainability requires pollution reduction, to protect water quality and soil
functionality, the preservation of biodiversity and ecosystem services, as well
as a reduction in greenhouse gas emissions. Solutions need to go beyond the
individual farm and also integrate the broader geographical context, including forestry
and nature reserves. Appropriate technology, ICT and satellite navigation
support, as well as new management tools, provide important development
potential. Education and training are essential for developing the skills
needed. Strengthening the farmers' position in the
supply chain requires innovative approaches that enhance transparency,
information, and management capacity and deliver new quality products.

Sustainable production must integrate input
and output substitution by the smart use and recycling of bio-mass and bio-refinery;
and it needs to reduce post-harvest losses. The challenge exists for the whole
supply chain from primary production up to the consumer. Consumers can
alleviate pressures for more primary production by changing consumption
patterns. Education and training offer a huge potential for enhancing
nutrition, healthy lifestyles, and reducing food wastage. Sustainability
criteria, established at pivotal points throughout the supply chain, would
contribute to increasing transparency, trust, and knowledge.

3.
Fostering a Competitive and Sustainable Union
Agriculture

The EIP aims to foster a competitive and
sustainable agriculture and forestry that 'achieves more from less' and works
in harmony with the environment. The EIP will help building a competitive
primary sector that secures global food availability, diversified products and
production, long-term supply of various raw-materials for food and non-food uses,
as well as a better allocation of added value across the food chain.

In order to make the increase in
agricultural productivity and output sustainable, natural resources must be
well managed, in line with environmental requirements. Land will be particularly
important, as this is the medium where the success or failure in moving towards
more sustainable patterns of production will be observed. Land is the essential
resource for agricultural production. Land use interacts in multiple ways with
water quality and quantity, biodiversity, and the provision of eco-system
services.

Climate change places emphasis on soil as a
particularly vulnerable resource. Soil functions including the stability of
soils, the soil water cycle, the nutrient buffering capacity, and the soil
biotic integrity are essential parameters of land productivity. Its function as
a carbon sink gives soil a key role in climate change mitigation. Appropriate
land management must prevent soil degradation and erosion, stabilise soil
functions, and address climate change mitigation and adaptation.

Given these objectives, two headline
targets have been identified for the EIP:

·
As an indicator for promoting productivity
and efficiency of the agricultural sector, the EIP aims to reverse the
recent trend of diminishing productivity gains by 2020[6].

·
As an indicator for the sustainability of
agriculture, the EIP aims to secure soil functionality[7] in Europe
at a satisfactory level by 2020. Soil functionality encompasses the productive
capacity of soils and its key roles in climate change mitigation and adaptation
and eco-system stability.

Whilst these headline targets refer to
primary production, the EIP will also tackle the many interactions across the
whole supply chain up to the consumer. The specific objectives of the EIP will
be elaborated upon during its concrete implementation, reflecting the strategic
orientations of the policies it is relying on.

Operational objectives of the EIP include
successful bridge-building between cutting-edge research and technology and stakeholders,
including farmers, businesses, industry, advisory services and NGOs. This
should help translating research results into actual innovation, faster
transferring innovation into practice, giving a systematic feedback from practice
to science concerning research needs, enhancing knowledge exchange, and raising
awareness on the need for joint efforts to invest in sustainable innovation.

The EIP strives to achieve synergies
through fostering exchange among partners from different policy fields,
sectors, initiatives and projects, thereby contributing to higher effectiveness
of existing policy instruments and complementing them with new actions where
necessary.

4.
Benefits and Opportunities

The combined agricultural and food sector
accounts today for 17 million jobs (7,6% of total employment) and for 3,5% of
total Gross Value Added in the EU-27. The EIP will reinforce the position of
Union agriculture as a competitive and resource efficient sector and contribute
to more sustainable forestry and land use practices. Up-stream and down-stream
sectors that provide "green" technologies to primary producers must
be integrated in the EIP and will also benefit.

To develop their full potential, the role
of farmers in the supply chain must be strengthened. Changes in consumer demand
towards safe, healthy, and high quality food point to an increasing importance
for local markets. The constantly growing market for food, feed, fibre,
biomaterial, and bioenergy provides economic development, employment, and
possibilities for social innovation. Making use of European genetic diversity
unlocks a vast potential for development. Thus, new product and market
opportunities are opening up for primary producers, and the EIP will help to
seize them.

Absent an innovation driver such as the
EIP, Union agriculture will face difficulties in increasing outputs while
avoiding further deterioration of productive capacities and natural resources,
in particular soil, water, and ecosystem services. The TEEB study on the "Economics
of Ecosystems and Biodiversity" suggests that the value of preserving
biodiversity from terrestrial systems will be in the order of 7% of estimated
GDP in 2050. As an example, the study refers to insect pollination, worth € 15
billion per year. Beyond this, the EIP will help securing carbon sequestration
and mitigating GHG emissions as well as reducing energy needs. Better knowledge
of nutrition aspects will change consumer behaviour and provide benefits for a
greater diversity and higher quality of products.

5.
Mobilising the Potential

Member States and stakeholders have repeatedly
expressed a strong interest in promoting innovation in agriculture through a Union-wide
approach. The European Council of 20 June 2008 pointed to the "need to
pursue innovation, research and development of agricultural production, notably
to enhance its energy efficiency, productivity growth and ability to adapt to
climate change". Similar conclusions have been drawn by farm
organisations and Chambers of Agriculture, and the G20 declaration from Cannes
underlines the primordial need to invest in agricultural research and
innovation.

The concept and content of the EIP
'Agricultural Productivity and Sustainability' have been discussed with a wide
range of stakeholders. Stakeholders underlined the need for an agricultural EIP
and emphasised the need to bridge the gap between farming practice and science
through smart networking.

The EIP will encourage partners at
different institutional and geographical levels and in different sectors to
collaborate and take advantage of the immense potential for synergies. Particular
emphasis will be placed on making use of the opportunities provided by
different policy fields, in particular the Common Agricultural Policy (CAP),
Union Research and Innovation Policy, Cohesion Policy, Environmental and
Climate Change Policy, Consumer and Health Policy, Education and Training
policy, Industrial Policy, and Information Policy. Close cooperation and
exchange on lessons learned will be ensured with other European Innovation
Partnerships, including the EIP on 'Raw Materials' and the EIP on 'Water
efficient Europe'. The latter is interlinked with the agricultural EIP, as it will
cover water infrastructure and water allocation in rural areas, while the
agricultural EIP will address water management and pollution reduction at farm
level.

6.
Transposing Innovation into Agricultural
Practice

The EIP will cover multiple stages: from
the core research process and the dissemination of research results to the
development of products and techniques and their integration in the production
process. An important role will be assumed also by certification processes that
confirm the increased added value of the research products.

In order to transpose innovation into
agricultural practice, the EIP will make use of a range of existing policies,
in particular CAP Rural Development Policy and Union Research and Innovation
Policy, to fund concrete innovative actions. Whilst Rural Development Programmes
normally act within the boundaries of programme regions, mostly at local,
regional, or national level, innovative actions at cross-regional,
cross-border, or Union-level need to be co-funded by Union Research and
Innovation Policy. Synergies should be sought with opportunities provided by
Cohesion Policy, in particular via regional innovation strategies and
transnational and interregional cooperation programmes.

The value-added of the EIP lies, first, in
its potential to focus existing policies towards innovation and, second, in its
nature as a dynamic platform linking farmers, stakeholders, and researchers.
Implementation will be channelled through operational groups as key acting
entities, involving actors such as farmers, scientists, advisers, NGOs, and/or
enterprises. The operational groups will constitute themselves around topics of
interest and will carry out projects aimed at testing and applying innovative practices,
processes, products, services, and technologies. At cross-border or Union level,
operational groups will act in particular through cluster initiatives and pilot
and demonstration projects. The concrete actions will be fuelled by the
knowledge base provided through the EU Research and Innovation Framework

An EIP network facility will be established
under the umbrella of the Rural Development Network. The network will animate
activities at Union, national, regional, and local level. It will encourage the
establishment of operational groups and inform about the opportunities provided
by Union policies. In return, operational groups have to report back to the
network about their projects. Thus, the network will act as a mediator in
enhancing communication and cooperation between science and practice. It will
help sharing experience, including failures, lessons learned, and good
practice. Moreover, it will foresee a systematic feedback mechanism to
incorporate practice needs into the research agenda.

A successful implementation of the EIP will
rely on providing and transferring relevant knowledge from a wide range of
disciplines forming part of the European research community. Considerable input
for discussing and developing consistent and relevant thematic orientations are
expected from Joint Programming Initiatives (JPI), the Standing Committee on
Agricultural Research (SCAR), ERA-NETs[8]
and European Technology Platforms. These initiatives will feed into the debate
on potential innovative actions and discussions on experiences made. They can
encourage the setting up of operational groups in view of multiplying
innovative action. The EIP network will contribute to a better linking of those
initiatives. Related monitoring and evaluation will ensure sound
implementation.

7.
Governance Structure

A high-level steering board, limited in
number and consisting of representatives from Member States and stakeholders
from both the supply and the demand side and appointed in their personal
capacity, will provide strategic advice and guidance through a strategic
implementation plan which identifies priority areas for action and
recommendations on how to achieve the EIPs objectives.

Following the experience of the pilot-EIP
on 'Active and Healthy Ageing', the work of the steering board will go hand in
hand with a full involvement of Member States and stakeholders in the concrete
actions and in the follow-up of the agricultural EIP. This will be sought also through
focus groups and thematic seminars, to be set-up by the network.

The EIP will rely on existing Union
policies. Funding, implementation, and prioritisation of actions will be based
on respective mechanisms embedded in those policies. Rural Development Policy
asks Member States to define quantified milestones (also for innovation) reflecting
Europe 2020 objectives. EU Research and Innovation Policy will support projects
in line with the strategic orientations and decision-making mechanisms of
"Horizon 2020". The EIP network will use existing mechanisms for
reporting to and interacting with Member States and Rural Development Managing
Authorities, including the Rural Development Committee and Monitoring
Committees.

8.
Areas of Innovative Actions

In line with the experience gained through
the pilot-EIP, the content and priorities to be pursued by the EIP should
emerge in an open manner and reflect the need for diverse solutions.
Translating new technologies, methods, and processes into farming practice and creating
a space for practical questions and guidance requires a bottom-up approach,
combined with effective networking. In line with conclusions put forward by the
OECD[9], the EIP will not rely on one
innovation model. Furthermore, consideration is given to the fact that innovation
may be technological, non technological, or social, and may be based on new or
traditional practices.

Several indicative priority areas for
research and innovation have been selected on the basis of input and exchange
with stakeholders and researchers. The list set out below shall not pre-empt
the content of innovation actions on the ground. Implementation of the EIP may
complement it.

·
Increased agricultural productivity, output,
and resource efficiency

This area of innovation actions aims to
increase agricultural output, while ensuring the efficient and sustainable use
of resources. Low-input production systems would target the sustainable use of
nutrients (including phosphorus and nitrogen) and pesticides, optimised use of
energy, water, and genetic resources, and lower dependence on external inputs.
Progress is needed in the field of integrated pest management, biological
control of plant diseases and pests, improved use of plant protection products,
and reducing GHG-emission from animal production and soils. Solutions for
recycling and the reduction of post-harvest losses would alleviate pressures on
natural resources. The potential of green technologies, such as ICT, precision
farming, and pest warning systems, should be explored.

·
Innovation in support of the bio-based
economy

Innovative solutions should be adapted to the
whole supply chain as well as the growing bio-based economy. Solutions should
be sought for bio-refinery and recycling and the smart use of biomass from
crops, forest, and food waste, valorising its cascading potential without
reducing soil organic matter. Consideration could also be given to substituting
primary protein production by algae or bio-fermentation. Breeding of animals
and plants could be explored for achieving higher outputs, reduced emissions
and/or better resistance to diseases, as well as higher quality of final
products (e.g. better nutritional profiles).

·
Biodiversity, Ecosystem services, and soil
functionality

Innovation that enhances sustainable farm
management and forestry practices benefits also eco-system services and soil
functionality. Particular emphasis should be placed on integrated agro-ecological
systems, including the enhancement of soil biodiversity, carbon sequestration,
water retention, ecosystem stability and resilience, and pollination functions.
Solutions could focus on improved land management (including low tillage and
maintenance of green infrastructure), integrated spatial planning and new
agro-forestry systems, as well as natural ecosystem conservation methods.
Further areas would include optimising the use of genetic resources, low
input/organic systems, increasing genetic diversity used in agriculture, and
developing bio-remediation for polluted soils, as well as innovative climate
change adaptation strategies.

·
Innovative products and services for the
integrated supply chain

The aim is to develop and deploy innovative products,
devices and services, alongside with establishing a transparent and sustainable
supply chain. The focus would be on better information systems and risk
management tools, reflecting the characteristics of products and production
processes, such as benchmarking, sustainability standards, foot-printing, lifecycle
analysis (with a focus on waste management), and certification systems.
Solutions could include managerial innovation for farmers, reinforcing their
role in the supply chains, e.g. through producer groups or short food chains. New
diagnostic tools would help tracking environmental and social performance of
farms. Solutions would include also exploiting the full diversity of our
genetic base, creating new and more sustainable opportunities, and establishing
institutional innovations (e.g. carbon markets). Effective monitoring systems
could be targeted towards residues in food (e.g. pesticides).

·
Food quality, food safety and healthy
lifestyles

Informed consumer choices are essential as steering
impulses to the whole supply chain. Areas of action would include food quality
and food safety, for instance through developing new food quality schemes and
livestock health care schemes. Bio-prospecting and the potential of medical
flora as a raw material resource could be explored. Other areas could include
natural animal and plant treatment and new methods to analyse the biological
qualities of food. Tools for changing consumption patterns and corresponding
education, information, and learning tools could help improve public health,
accompanied by healthy ingredients in products (e.g. milk or oil with omega-3
fatty acids) achieved by further developing nutrients and through animal
breeding. The consumers' role in reducing post-harvest losses could be addressed
by intelligent packaging approaches as well as education and information.

9.
Next Steps

Given the need to shift development
patterns towards sustainable growth in agriculture, these activities should
start as soon as possible. This Communication intends to encourage discussion
with Member States, European Parliament and stakeholders about the strategic
objectives and format of the agricultural EIP.

Taking into account the views of the
European Parliament and the Council on this Communication, a strategic implementation plan will be prepared. As a preparatory step, technical assistance provided by Rural
Development Policy will be used to establish network facilities. The timely
establishment of an EIP network is needed to ensure early information of actors
and stakeholders concerning opportunities for innovative action. It will
facilitate the process of translating priorities into concrete innovative
actions on the ground.

[1]               COM (2010)2020.

[2]               COM (2010)672

[3]               COM(2011) 500

[4]               COM(2010) 546

[5]               COM(2011) 571final

[6]               Measured as 'total factor productivity'

[7]               Including: Reversing the trend of losing soil organic
matter; appropriate farming practices on agricultural land susceptible to
erosion.

[8]               ERA-NET schemes support the cooperation and
coordination of research activities at national or regional level

[9]               OECD and Eurostat (2005), Oslo Manual: Guidelines for
Collecting and Interpreting Innovation Data, Paris.