A new report that reviews the use of neonicotinoid seed treatments in the European Union was released this week. The report shows the socio-economic, environmental and technological benefits of using this type of seed treatment in protecting EU crops.

The study also aimed to review the impacts to farmers if EU countries banned the use of neonicotinoid seed treatments. The research showed that in the short term, depending on when the ban took place during the crops’ growing cycles, yields could be reduced, which would likely have an impact on commodity prices and contracts. Commodity prices could be expected to increase by up to 2 percent relatively quickly, according to the report.

“Neonicotinoid (NNi) technology potentially contributes a total of 2.1 billion EUR to crop market revenues and lowers production cost by 0.7 billion EUR, which would be lost if NNi were removed from the toolbox available to the farmers. … If economic impacts up and downstream the agricultural value chains are included, the monetary impact of using NNi to protect crops is even larger. Applying the defined sets of multipliers, it can be stated that, in total, NNi contributes between 3.8 billion and 4.5 billion EUR to the GDP of the EU under one scenario and between 5.4 billion and 6.3 billion EUR in another scenario,” according to the report.

The immediate damage to EU wealth could be as large as 6 billion EUR in the first year, according to the report.

The research also looked at the impacts regarding labor costs. The study revealed that more than 860,000 jobs in the EU agricultural sector would be put under stress without the use of NNi technology. The importance of this stress is larger for countries with lower agricultural labor productivity. These jobs are considered stressed if they are either lost or wages and income of the worker are reduced. More than 40,000 farm jobs could be lost across the EU, mainly in Eastern Europe, the report stated.

Over time, economies and the sectors would be able to adapt to the market shocks. Within five years, EU farmers would potentially be able to amend their output and input structures to better cope with a ban or suspension.

Trade of the top six focus crops would likely decrease. Wheat exports could decrease about 16 percent and barley could shrink by 38 percent. Corn imports could increase as much as 57 percent and imports of raw sugar would have to increase by nearly 31 percent. Sunflower seed would be most affected as the EU would have to become a net importer instead of a net exporter, which could lead to shortages of protein feed, which could lead to higher soybeans or soy meal imports.

The report is supported by the European Farmers and European Agri-Cooperatives (Copa-Cogeca), the European Seed Association (ESA) and the European Crop Protection Association (ECPA). It was financed by Bayer CropScience and Syngenta.

Click here to read the report.