“Food security is dependent on a stable and reliable European and international trading system”
In its day-to-day activities, the VanDrie Group is dependent on the European and international trade in agri-food raw materials and end products. Together with his colleagues from the Food and Feed Ingredients (FFI) department, Marcel van der Vliet coordinates the purchase of raw materials for calf milk powder, muesli, dairy ingredients for animal feeds and raw materials for foods from the company’s head office at Mijdrecht. In addition to his role as Sales and Procurement Manager for the VanDrie Group, he is also the unsalaried President of the umbrella organisation CELCAA, the European Liaison Committee for the Agricultural and Agri-food Trade. Iliana Axiotiades, a fellow board member of CELCAA and also Secretary General of Coceral, is an important cooperation partner for Van der Vliet. Coceral is the European association for the trade in cereals, oilseeds, pulses, olive oil, oils and fats. In times characterised by an increasing demand for sustainably produced good, increasing geopolitical and trade policy tensions and the impact of the coronavirus pandemic, they talk about the importance of a robust and predictable trading climate for the EU and the rest of the world.
Where do you source the raw materials for the VanDrie Group and what purchasing requirements do you need to take into account as buyer?
Van der Vliet: “By far the bulk of all raw materials that we purchase as VanDrie FFI come from the European Union. Our guiding principle is: we purchase from sources where we find the optimal balance between proper safeguarding of quality, availability, security of supply and competitiveness, from nearby where possible and from further away where necessary. All ingredients and raw materials must meet the purchasing requirements and specifications as set out in our quality system Safety Guard. Every (new) raw material is assessed on the basis of availability, quality, price, technical and material data sheets and ISO and GMP+ certification, and all of the raw materials we use comply with the current Dutch and European legislation.’
Many European companies are dependent on international trade just like the VanDrie Group. What impact has the coronavirus pandemic had on your work and on the trade in raw materials?
Van der Vliet: “When the borders closed in March 2020, this immediately led to much international uncertainty. For the VanDrie Group, the disruptions were primarily caused by declining veal sales and less by the logistical supply of raw materials. Nevertheless, our food and feed factories didn’t come to a halt for a single day and we were generally able to supply our customers well. The impact on raw material prices was and still is great. Market sentiment plays an enormous role and as a result of “lockdowns” in various countries and at different times during the year, logistics chains were ultimately disrupted. As a result, volatility in the price of raw materials increased. After a short initial period of sharp price decreases, we have been in an enormous “commodity bull market” for some time now. The question, of course, is how long this will last. In my work as buyer and seller of raw materials and dairy ingredients, travelling and meeting people is essential. Doing business is about trust; you want to be able to look someone in the eyes, get to know his or her company and inspect factories or warehouses. As a result of the travel restrictions, this aspect of the work has come to a standstill for almost a year. However, it has also led to the necessary creativity and it is surprising how many things you can deal with digitally and online. Today, it is now impossible to imagine life without monthly market calls with suppliers and customers, and online audits.
Axiotiades: “At the beginning of the crisis, we were still seeing longer queues at the border. The European Commission responded to this quickly by introducing so-called ‘green lanes’: measures to enable lorries to cross the border more quickly. For example, by waiting until after the border to carry out possible health checks on drivers, at the first car park in the destination Member State. A lot more use was also made of electronic documentation, in order to reduce physical contact, but also to streamline the processes. I expect that this change will be permanent. What is more, I noticed that organisations such as Coceral and CELCAA started cooperating more effectively and exchanging more information between themselves. When you are a trader and are faced with the same problems as other traders on a daily basis, you start looking for solutions together.”
As no country is self-sufficient in terms of its food demand, trade arises and trade is necessary.
Last year, we saw the impact of disrupted trade worldwide – including in Europe. This just serves to illustrate that the European trade in raw materials is a complex one in which many forces are at play. In what way are CELCAA and Coceral fulfilling their role as network organisations within this context?
Axiotiades: “Global trade plays a vital role in the supply of primary agricultural products from regions with a surplus to regions with a shortage. Trade is therefore an important tool for strengthening food security in the world. While we are good at producing grain, corn and barley in Europe, we come up short, for example, in terms of the production of protein-rich vegetable raw materials, such as soya. As no country is self-sufficient in terms of its food demand, trade arises and trade is necessary. Solid and predictable trade flows ensure that all regions can be supplied at any time.”
Van der Vliet: “Exactly. Trade in agri-food raw materials that is as unrestricted as possible and tariff-free trade is an important requirement to be able to meet the global food demand and to keep food affordable for everyone. That is what CELCAA and Coceral are committed to. Our members connect the primary food and agricultural raw material producers at the beginning of the chain with European and international customers and processors, the food and drinks industry and their distributors, the wholesalers and retailers. CELCAA not only maintains good contact with the European representatives of farmers and market gardeners, but also with the trade association of food processors, and we work together as a chain in our interactions with administrators and policymakers. In addition to strong representation in Europe, we also share a lot of knowledge among ourselves. Legislation and regulations in terms of pesticides or dioxins, for example, affect both the wine and fruit sector, as well as the meat and dairy sector.”
The global population will grow substantially by 2050 and the need for food and fair food distribution will increase further. How can you as umbrella organisations, but also as VanDrie, ensure there is the fairest possible distribution?
Van der Vliet: On the one hand, there are still 800-900 million people who go to bed hungry and on the other hand, there are over 1 billion people who suffer from obesity. This is a paradoxical situation which people themselves, NGOs, the business community, industry organisations and knowledge institutions need to change together. In principle, there is sufficient good-quality food worldwide, but it doesn’t reach everyone. A major challenge in many countries is the absence of the right framework for production, preservation, processing, value creation, marketing and distribution. Within the United Nations, they have agreed that agricultural productivity must be increased through investments, so that more food and sustainable food can be produced. Market disruptions and trade restrictions must also be avoided; well-coordinated food chains are crucial for this. Every day, I try to contribute, as much as possible, to the achievement of these global goals both through the CELCAA and also in my day-to-day work.
Axiotiades: “I agree with that. In addition, we can see that consumers from different geographical regions have different expectations and needs as far as the availability and quality of food is concerned. Traders must be able to meet every need. As representatives, Marcel and I must ensure that the conditions under which they do that are fair. That is the reason why we are committed to a level playing field. That is a fairly big challenge. Food security is best served by a good balance between local and intra-European production, trade and international import and export. If we put our European producers at a competitive disadvantage on the basis of much stricter European legislation and production norms, standards and methods, the EU will have to import more and more agricultural raw materials. Including from countries that are not always so stable politically. Trade and geopolitical tensions may then lead to a disruption of supply chains, thus endangering food security. International cooperation with agro-economic diplomacy, including at the level of the World Trade Organization and the Codex Alimentarius, is therefore essential.”
I NOTICE ALREADY THAT THESE FORTHCOMING LAWS ARE AFFECTING POLITICAL RELATIONS AND ARE LEADING TO DIFFICULT DILEMMAS.
With a view to the future, what are the most important factors in your opinion that will affect the international commodity trade?
Axiotiades: “The European Farm-to-Fork legislation will be introduced as of 2030 and that will change a lot. From that point onwards, it will only be possible to import products that comply with the strict European legislation. That will have an impact on the commodity trade, for example due to a difference in the Maximum Residue Limit (MRL) that people apply. These are limit values for residues from crop protection products, for example, or veterinary medicines. If these limit values differ even further between continents or countries, companies like the VanDrie Group will have to fulfil increasingly complex expectations. I notice already that these forthcoming laws are affecting political relations and are leading to difficult dilemmas. Is it possible, in spite of the growing demand for soya, for Europe to force a country such as Brazil not to cut down any more forests by means of legislation, even if they approve it themselves?
Van der Vliet: “Geopolitical developments will always affect the international commodity trade. Avoiding and reducing tensions between countries, alliances, trading blocs and regions is therefore of major importance. My expectation is that the further development of agricultural and processing technology will help farmers, market gardeners and processors to make food production more and more efficient and sustainable. The Netherlands and the EU as a whole will have to try to retain a leading position in the production of agri-food raw materials, ingredients and products. In addition, digitalisation and the development of online marketplaces, tenders, auctions and e-commerce are advancing. Further away, in the emerging economy counties, people are primarily looking for good-quality and affordable food and they are trying, just like we did, to climb the ‘food ladder’ by feeding themselves with the right mix of locally-produced and internationally-produced raw materials, ingredients and end products.”