German economists rage: Are European farmers harming the EU and themselves?

Germany, France, Belgium, Poland, Romania, Spain, Portugal – farmers across Europe are letting their anger out. High costs are a problem, as are low prices in the supermarket. But some sensitivities are very special. Economists warn.

The major protests by German farmers have subsided, but their anger over the decision to abolish agricultural diesel continues. They still block roads and supermarket warehouses. They talk about distorted competition in Europe in which they can no longer survive.

Meanwhile, farmers in Belgium, France, Greece, Poland, Portugal and Spain are also taking to the barricades claiming similar things. They also protest against diesel prices and unfair competition. The impending danger is positioned very differently globally depending on the country, company and cultivated product.

The most radical protests in recent weeks have taken place in France. Angry farmers dumped manure and rotting food onto the streets in Toulouse, in the southwest of the country, among other places. A farmer died in the region when a driver attempted to break through a roadblock.

France against Morocco and South America

In principle, no other EU country receives as much EU agricultural subsidies – nine billion euros – per year. Nevertheless, French farmers complain about unfair competition. Among other things, they criticize their government’s fight against inflation and high food prices. If these fall, they would earn too little, it is said. Become a symbol of protest Tomatoes from Morocco which have been dumped in supermarket parking lots across the country because they are supposedly too cheap.

The French farmers have already achieved their first stage victories. Two important unions called for the protests to end for the time being after the French government announced concessions: it wants to offer more financial support and no longer import products that use pesticides banned in the EU. This is intended to prevent dumping prices and stabilize incomes.

Above all, the French government declared last week that it wanted to block the Mercosur free trade agreement with Argentina, Brazil, Paraguay, Uruguay and Venezuela: French farmers claim that they cannot compete against South American beef imports because less stringent environmental and animal welfare requirements apply there.

German economists are raging

The French announcement hit a political nerve because it was made without consultation with Brussels and Berlin: Mercosur could “improve the growth prospects of our continent,” said Olaf Scholz on Monday at an appointment with the French Prime Minister. The negotiations began 20 years ago, the Chancellor recalled. It would be desirable if they were completed soon.

The German Economic Institute (IW) made it even clearer: “It cannot be the case that the particular interests of a single member state torpedo the overarching EU interests in such a fundamental way,” the German economists wrote in one opinion. There is no statistical evidence of the concerns of French farmers. Instead, the Mercosur agreement is also important because it helps to become more independent from China. The economists’ demand is clear: the EU Commission must speak out and, if necessary, decide on the agreement without French consent.

EU Commission gives in

However, the EU Commission is currently also trying to limit the damage, because the protests are explicitly directed against environmental regulations and environmental levies from Brussels, because – so the farmers accuse – they mainly eat up time and money. During the special EU summit on Ukraine, it was primarily Belgian farmers who blocked their capital with 1,300 tractors and set fire to stacks of tires, even though the EU Commission had already given in at that point: Farmers do not have to leave four percent of their arable land fallow this year, as planned, so that nature can recover. In addition, Commission President Ursula von der Leyen withdrew a law to reduce the use of pesticides in the EU. A plan to reduce bureaucracy in agriculture should also be drawn up by the end of the month.

Polish, Spanish, Portuguese and Romanian farmers also criticize “overwhelming bureaucracy” and EU environmental regulations. Eastern European farmers, like French farmers, also resist cheap imports from abroad, although not from Morocco or South America: Polish, Romanian and other Eastern European farmers are bothered by cheap, duty-free imports from Ukraine. It is said that these would distort the market for Eastern European farmers.

Duty-free imports were allowed in 2022 after the Russian attack in order to strengthen the Ukrainian economy. The current plan is to allow them until June 2025. However, the EU Commission responded to the protests from Eastern European farmers and proposed protective measures for “sensitive” agricultural sectors in January: an “emergency brake” is planned for sugar, eggs and poultry if imports from Ukraine exceed the average for 2022 and 2023 exceed. In this case, tariffs may be reintroduced. But that could mean that the EU has to support the Ukrainian economy in other ways.

“Many politicians didn’t understand that”

The problems facing European farmers are diverse. However, agricultural economist Sebastian Lakner from the University of Rostock does not believe that the EU is the right contact for the angry protests. He also doubts that the latest concessions from Brussels will improve the situation in the long term. “I have the impression that you’re looking for a bogeyman against whom you can demonstrate together,” said he in an interview with the taz. “It’s like the Titanic sinking and the commission throwing two lifebuoys behind it.”

The agricultural economist can understand that farmers are frustrated by intra-European competition distortions and bureaucracy. But these are home-made problems, he said in an interview with ntv.de in mid-January at the height of the German protests. Because individual EU countries like France use EU funding programs more extensively than others like Germany. This funding contributes to the market being flooded with certain products, which causes the prices of food in the supermarket to fall.

At the same time, these subsidies artificially keep companies alive that have not been competitive for a long time, said Lakner. That is bitter, but the truth is that a natural structural change has been taking place in agriculture for many decades. “There are fewer and fewer businesses and they are getting bigger. After the Second World War, 25 percent of the population worked in agriculture; currently it is around 1.5 percent.” The economist emphasizes that this is a continuous process that agricultural policy can neither influence nor stop. “Many politicians didn’t understand that,” says Lanker: It’s fruitless to blame political opponents for the farms dying out.

Blocking environmental, animal and climate protection measures is similarly fruitless. They are expensive and painful for many companies, but they are also in the interest of farmers. Because apart from the fact that agriculture is one of the largest Causes of climate change is, she is also the first victim: No other industry is so dependent on the weather, emphasizes even the German Farmers’ Association. Longer dry seasons and droughts cause lean boarding; Storms and heavy rain devastate the fields. Winters that are too mild without hard frost attract pests and diseases. This development cannot be stopped by protests.