Regional, National and Global Markets are Driving Agriculture: the German Example

Written by Willi Kampman, Head of International Affairs' Department, German Farmers' Association (DBV)

Global market dynamics in agriculture International trade is growing dynamically and so is agricultural trade. In 2013, the global agricultural trade volume tripled from a value of 282 billion Euros in 2000 to 947 billion Euros in 2014. The European Union is actively participating in this global expansion. The European Union had a significant deficit in agricultural trade for years. In 2014 the Union imported agricultural products worth 114.9 billion Euros and export products worth 115.9 billion Euros. The European Union has undergone a development from a traditionally net importer into a net exporter of food and feed products. The specificity of European Trade lies in export of products with significant value added. On the contrary imports are dominated by commodities.
Added-value is the secret of European trade. Due to high costs, only the concept of value added products is economically working. Innovation and differentiation are key driving factors for European trade in general and, German trade in agricultural products in particular.

What about Germany?
Germany belongs to the world leaders in exports of goods and services. However, as far as agriculture is concerned, Germany remains a net importer of food, feed products and beverages. In 2000 the German trade deficit counted for 14.7 billion Euros. Since 2000 agricultural exports have doubled. Still, in 2014 the trade deficit decreased to 8.7 billion Euros. Generalcharacteristics of German exports are added-value, quality and security.
The most common export products were dairy products, different sorts of cheese, meat as well as meat preparations and, sausages. The most important partners for Germany in agricultural trade are the member countries of the European Union. 70% of German imports are from the EU Member States, while 77% of German exports are going to one of the Member states of the European Union.
Germany and the European Union: solid partners for developing countries in trade
The European Union is a solid trade partner for both the developing and the emerging countries. In volume, the Union is importing more agricultural products from those countries than the US, Canada,Japan, Australia and New Zealand all together. In 2013, approximately 69% of EU’s imports from third countries came from developing countries and emerging economies and, amounted to a value of almost 80 billion Euros.
In line with the Everything-But-Arms and the African–Caribbean-Pacific Agreements, Europe grants special preference to developing and emerging countries.
In Germany, 71 % of agricultural imports from non-EU countries (worth 16 billion Euros) are from developing countries and emerging economies.
The most important products are coffee, oilseeds, fruit and vegetables as well as fruit juice products.
Despite global trends, increasing popularity of regional products.
Markets are becoming more and more globally oriented. Still consumers are also inclined to purchase regional products. This is a challenge to the German agriculture and, an opportunity at the same time.
Nowadays, consumers are able to buy any classic seasonal product of their choice all year long, for example strawberries at Christmas time. However at the same time, products taken from their immediate proximity are gaining increased popularity.
German farmers endeavour to meet this demand thanks to direct marketing (famer to customer). Still this will remain a niche market.
Global markets are reality. German farmers are willing to have their share in increasing global markets. German farmers are also able of meeting consumers’ demands for local and regional products. In the end, consumers have to make their choice.

 

Share