European agriculture was never the easiest or the most exciting topic, and always raised controversial questions. An average EU citizen does not think too much about agricultural systems, does not care about prices and does not complain about quality, and chooses the most cost efficient products. Few people know how important this matter is, what a major role it plays in EU policy and how it is affecting our security policies or economic achievements. It is not the first time that farmers are protesting all around Europe by building roadblocks, burning tires in front of EU Institutes and flooding streets with wine. The unpleasant events were met with mixed reactions. From the one hand it is counterproductive to block a road with a 100K € tractor. On the other hand it is a desperate warning for a long latent problem. Despite the lack of coordination, farmers raised their voices in the same time, also the causes were different. In Germany the withdrawal of tax cuts for farming diesel, in Romania the rising prices of fuel and insurance fees, Poland struggled with import grain from Ukraine, in Netherland the reduction of livestock population and so on. The protests send us the clear message that something does not work correctly in EU’s agriculture policy.
Farming – one of our oldest professions – did not age well, especially when we are talking about local small sized farms and family businesses. Despite the fact that it is one of the hardest jobs, the income rate is quite law, not to mention all the things which can go wrong, from weather conditions to diseases. Still or exactly for that reason 32% of the EU budget (around €387 billion between 2021 and 2027) goes for agricultural expenditure in many ways. The common agricultural policy (CAP) supports two funds or pillars, the agricultural guarantee fund, which supports income schemes and markets (€290 billion), and the fund for rural development, which helps to address the challenges posed by the COVID-19 pandemic. If we look at EU statistics, agriculture contributed 1.4% to the EU’s GDP in 2022, still it is one of the most supported sector. So we can ask then, what is the reason for the “hustle” now? Well, the reasons are not so obvious, many unfortunate events, lack of empathy, and short term bureaucratic thinking has led the European farmers to the roads.
Green Deal
The European Commission has adopted a set of proposals to make EU’s climate, energy, taxation policies fit for reducing net greenhouse gas emission by at least 55% by 2030, and be climate neutral by 2050. This policy became a main target for farmers around the EU, because the agricultural ambitions are unsustainable (Farm to Fork agenda). These are some of the widespread ideas regarding banning plant protection product, reduction of the use and risk of pesticides, fertilizers, antimicrobials. Reaching 25% of agricultural land under organic farming of which the current level is 8%. On paper these sound great, the main goals even better, putting consumers and producers in the centre. But in reality as every new strategy needs time to prevail, especially if the lawmakers (Brussels) only focus on loud, easy-to-sell eco-friendly slogans which could fit in their EU parliamentary election campaign, while not just mindlessly, too quickly and without any kind of transition trying to push their agenda, they even create obstacles as see below. To be fair, the dialogue started last year announced by Ursula von der Leyen to settle disagreement between farmers and the government. The group of 30 chain producer representatives lead by a German expert makes a report about the results focusing on: income and honest lifestyle, environmental protection in production systems, innovation and competitiveness. There is a debate about how does the Green Deal affect the sector, because it is not even applicable, many key points have been modified or cancelled, but the market priced it. Again, it stays one of the key issues of the EU, a very important one, but the execution has blind spots.
Unbalanced CAP
The first signs of dissatisfaction emerged in France in autumn 2023, when the union Young Farmers protested against the late payments from CAP budget. The CAP was always a field for reforms but the latest ones included new procedures, environment-friendly practices, new strategies on national level and 5 year growth plans. The new processes required new authorities which increased administration measures led to longer payment process. The complicated procedures caused a shortage of investments which led to raising debts. Economic environment was not supportive either since the pandemic and the Ukrainian crisis increased record high inflation, ground materials became expensive, and while the products’ price tags tried to follow the changes, the demands decreased. New requirements were introduced as well which did not won the heart of farmers, following of 4% arable land – increasing biodiversity – was actually suspended due the Russian invasion on Ukraine, but from 2024 it has been put back on the agenda. There is also a lack of balance in distribution of funds. Most of the financial support goes – through size of agricultural area (AA) – to industrial size producers. The top 20% of the companies owns the 83% of the AA, so 81% of aids goes to them. For example in France (the greatest beneficial of CAP) the biggest agricultural companies (top 20%) farm on 52% of the AA, which allows them to get 35% of all CAP assistance. This harms small family businesses, who became more vulnerable to aggressive expansions and in the end the customers’ interest are harmed.
Import issues
The war in Ukraine has many impacts on political and economic fields, not to mention agriculture. While there is a great sympathy and helpfulness towards the attacked country, some measures caused chain reaction in the market. To support Ukraine, the EU suspended all duties on the country, which led to flood of goods such as eggs, sugar, poultry due to the cheap import products. Providers from France could not compete against half price products without any restriction on production, cheap labour force and forage. But our eastern neighbour is not the only one benefiting from double standards in the EU. In the case of Kenya or New Zealand the same problem arises. Cheap products, no regulation, not to mention the MERCOSUR agreement, which could be a dealbreaker. While the negotiations cover a lot of issues beneficial for both sides, trade numbers rise, agriculture will be or it is already a sufferer of the disadvantage. South American countries stand on a solid ground together regarding economic growth compared to demands of EU environmental and production regulations. Also agriculture plays a major role in the economy, not like in the EU.
Some experts say actually it would be easier – even cheaper – to import everything to the EU regarding agricultural products, but of course it would be such a “dumb” idea as putting our security in the hand of a foreign country across the Atlantic. We need independent, environment-friendly and sustainable agricultural production capacity. The EU has the money for this, it needs the will now. What we do not need is haste. We should take our time to implement new strategies, and have some empathy towards the agricultural sector as well. Putting the farmers in a situation, where the only way out seems to be protesting, is not the right one. We need dialogue, and politicians to understand what is at risk now. The world’s top agricultural producers are China, India, the United States and Brazil. While we can agree that EU countries will not be the greatest or cheapest producers, and the EU’s agriculture all together will not be a profitable business, it will at least secure the independence from the countries mentioned above and will be an example to be followed regarding green ideas.
