With the restrictions on neonicotinoids, the European Union has made a far-reaching intervention in agricultural production. The aim was to protect biodiversity and ecosystems. But what is the economic impact of these regulatory decisions?

This study is the first to analyse, on the basis of long-term production data, the extent to which the EU has moved away from global production trends for key crops since the introduction of restrictions. The focus is on rapeseed and potatoes, supplemented by winter barley as a control crop.

The result: regulation was accompanied by a structural production gap that can be measured in billions. At the same time, the actual objectives of regulation were only partially achieved.

Methodological approach

To quantify the effects, an econometric comparative approach is used in which production development in the EU is compared with development in the rest of the world. In this way, it is possible to estimate how EU production would probably have developed without stricter regulations. For rapeseed, the cut from 2014 (1st EU regulation) is taken into account, while for potatoes the period from 2019 (2nd EU regulation) is analysed. Winter barley serves as a control crop in order to separate general weather or technology trends from regulatory effects. The identified production deviations are then evaluated using representative producer prices in order to quantify the economic dimension of the observed changes.

The most important facts in brief

The analysis shows a clear decoupling between EU production and global growth:

• The difference in rapeseed production for 2023 is around 10 million tonnes, which corresponds to a value of around 4.8 billion euros.
• The deviation for potatoes is around 6.2 million tonnes, with an equivalent value of around 1.1 billion euros.
• Overall, the directly quantifiable production loss for 2023 totals around 5.9 billion euros.
• The winter barley control crop developed in line with international trends. This indicates that the differences observed in oilseed rape and potatoes are not primarily due to general site disadvantages or climatic factors.

Conclusion

In addition to the direct production losses, the study also highlights further-reaching economic implications. The regulatory interventions are accompanied by declining EU global market shares for the affected crops and at the same time increase import dependency. There is also a risk of value creation being relocated to countries with lower regulatory requirements, which could shift production and investment decisions in favour of less restrictive locations. In this sense, regulation not only affects environmental and health issues, but also key aspects of competitiveness, security of supply and the strategic autonomy of the European Union.