Minister of Agricultural Development and Food, Makis Voridis, discusses how the EU’s Common Agricultural Policy and Agricultural Programme for Growth are being adopted to develop smarter and greener farming, initiatives to protect the status of the nation’s high-quality food products, and investment opportunities for foreign investors in the food industry
What is your role as Minister of Agricultural Development and Food and what are the main priorities that you have set yourself in this new position?
One thing we are working on now is putting the structural framework in place where we will have agricultural cooperatives formed by different actors in the agro-sector. By the beginning of November we are going to present a draft law to parliament which will deal with these issues.
According to EU regulation, in order to achieve the goals that are going to be incorporated into the new Common Agricultural Policy (CAP), you need to have strong unions of farmers. Why is that? Practically 50% of EU money goes to farming. So, CAP is the strongest policy that exists within the EU framework. And now the EU has decided that it wants agriculture to contribute to the efforts being made to deal with climate change.
So incorporated into the CAP are environmental policies, such as using pesticides in a more careful way in order to not pollute the environmental, the land or the product itself. Also, you need to use fertilizers in a more environmentally friendly way; you need to use water in a more efficient way. In order to achieve those goals, you obviously need investment and new technologies.
Then we come to the question: who is going to invest? Now if you look at the individual farmer in Greece, he doesn’t have the capacity, the leverage, the money or the ability to deal with the bureaucratic burden in order to get money through the CAP to make these investments in his farm. So you must have farmers unions that know what is needed and have the ability and capacity to use the money that is being provided by CAP and deliver that money to the farm. So that is why we this structural reform is needed, because we need transparent and trustworthy structures of cooperation for farmers so that they will be able to absorb this kind of money and use it to achieve the environmental goals.
The second thing is that, from the Greece side, we have to draft and agree with EU the priorities that are going to be set in the next Programme for Agricultural Growth. This is of the utmost importance because depending what we are going to have in this Programme, this will actually move investments towards a specific field.
The third thing is that we already have a gap of funding in agriculture: 2 billion euros is needed for farmers to put them in a position to participate in the Programme for Agricultural Growth. So this will be a combination of EU money and the farmer’s money, which creates the Programme. And in order to get the EU money, you already need to have the farmer’s money. If the farmer doesn’t have the money he won’t be able to participate.
That is why you have a lot of demand for capital and why a programme has been created with the European Growth Fund, which is supported by the European Investment Bank. So we will able to provide half a billion euros to our farmers with low interest rates that will allow them to participate in the Programme.
So in the next few years we’re going to have a huge transformation of the agricultural sector – the shift to more high-tech, intelligent and greener agriculture. And, ultimately, this is also related to the food industry, because it is a bit meaningless to compete on who is going to achieve the lowest price.
As you know, Greek products – olive oil, olives, fruits, vegetables, cheeses, yoghurts, wines – are high quality products. So the idea is that you protect this high-quality product, you brand it and you sell it to a market that is more demanding and not just looking for the lowest price, which, of course, is the European market. This clientele want to know: how you made that cheese; where did you get the milk; in what conditions did you breed your sheep or cows; and what’s the added value in what you have produced. And I think that goes for a lot of our products. The fact that we now recognise that this is our type of clientele reshapes the ways of farming and the ways of producing. Therefore, if we’re talking about structural reforms, this is the great path on which we have to work.
Can you elaborate more on how you intend to advance this new era of smart agriculture from a Greek perspective?
The important thing is that these ideas should become part of the farmer’s knowledge. Unless these visions and practices are adopted by our farmers, then it will never be more than a bunch of experts talking about this amazing idea. So to do that, there are two tools. One thing is within the Programme for Agricultural Growth, there is a programme for consultants, who will go to the farm and explain these things to the farmer.
The second thing, of course, is funding and investment. And there is also a third issue that does arise, which is the so-called ‘conditionalities’ – meaning that if a farmer wants to obtain subsidies, he has to keep to certain norms and practices when cultivating. So all this creates a rather complex structure of the CAP. But in my view, this is what they we are going to be providing to consumers in terms of high-quality food in the future.
One issue of course is the replication of Greek products. What is your view on this and what initiatives are in place to combat this?
Of course, this is a global issue. What exactly we protect is the identity of certain foods. Now you have different levels of protection in the EU, which are quite sufficient and sophisticated. You have the so-called POPs, which is ‘protected origin products’. And POP not only certifies the place where the products come from but also how they are produced.
So with Feta, for example, the milk needs to come from sheep or goats, not cows, and must be kept in barrels made from wood or metal, but not from plastics. So there are all these conditions you must fulfil to advertise your product as Feta.
The issue is that the POP legislation only concerns the EU; it doesn’t cover China, Australia or the U.S., for example. So the U.S. will probably argue that Feta cannot be protected; it’s generic, it’s a type of cheese and anybody can produce Feta. They use the same argument for Parmesan or Roquefort. They’ll say that ‘Roquefort is a type of cheese and I can produce it in California’. They label the cheese as a Roquefort from California and the buyer has all the information and they can decide.
What we argue is that Feta, at the end of the day, is only produced in Greece and cannot be produced anywhere else. But not only that, you must also respect how Feta is produced.
So this is an ongoing debate and the best way to solve this is to have bilateral or multilateral trade agreements. And I think that’s what the EU is trying to do in order to protect European POP products.
It’s true that investment in agriculture has perhaps not been so strong. What are you views on that and is there a role for German investors to enter and help in the agriculture restructuring process?
Of course investors are welcome but I don’t know if someone is going to come here from Germany to buy land, settle in and try to produce things. But I do think there is huge potential for investment in the food industry, which is very dynamic. There are already cases of foreign investors investing in the food industry. There are many big companies that have shareholders of non-Greek origin. Two or our major dairy companies are owned by foreign investors. So foreign investment is already happening in the food industry and it’s more than welcome.
I can give you an example that is maybe temporary but is a good one. There is currently a tax of 25% on olives and olive oil entering the U.S. market from Spain and Italy, but not from Greece. That gives a huge competitive advantage to the Greek olive oil in the U.S. market. One of the challenges that producers will have is that they now need to brand Greek olive oil in order to send it to the U.S. market. So you now need capital very quickly in order to do that because there is an opportunity to completely reshape the market. Therefore, one avenue is for German investors to come here and put money into that business. So there are opportunities like that.
Is there anything else that is important for you that we haven’t touched upon?
Another thing that could be interesting in Greece is ‘agro-gastronomic tourism’. This is one of our comparative advantages that could be combined to create some interesting products.
For example: Greece is, of course, a country with a heavy tourist industry. People come here for the sun, the sea, the sand and all this. Now there you could add food – and high-quality food. High-quality doesn’t necessarily mean just expensive, gourmet restaurants. But you can also have the little ‘taverna’ which will sell good Feta, nice tomatoes, fresh fish and other local products.
The tourist coming from Norway, for example, would probably like to buy this type of service. So part of his vacation experience is local food and local cuisine. And this creates a demand for a type of service that is very positive for both agriculture and the tourism industry.