All of the factors of why there are tractors
Separating the wheat from the chaff.
Welcome to Not in Dispatches, where this week we take a closer look at the tractor cavalcade ploughing through the streets of Brussels and many other places across Europe. Beyond the tensions in the EU capital this week, we also look at how the continent’s farmers are capitalising on the perfect storm of June’s European Parliament elections, the implementation of the EU green deal, and the pressures of the cost of living crisis.
A short history of farming in Europe
In 1962, the Common Agricultural Policy (CAP) was launched in Europe with the aim of providing affordable food to EU citizens while maintaining a fair standard of living for farmers. In 1992, the CAP changed from market support to direct payments to farmers. Today, the CAP represents one-third ofthe EU’s budget, amounting to a total of €383.8 billion, of which €270 billion (or 70%) is provided through income support schemes.This has protected, and promoted, small-scale farms, bucking the trend seen in developed countries.
On 1 January 2023, CAP 2023-27 entered into force. Under the change, Strategic Plans were launched to help farmers balance producing high-quality and cost-effective food while making significant contributions towards the European Green Deal, The Farm to Fork Strategy, and the Biodiversity Strategy. The changes aim for a fairer, greener and more performance-based CAP.
The Strategic Plans formalise agriculture´s role in meeting the EU climate objectives (reducing carbon emissions by 55% in 2030 compared to 1990 levels, and meeting Net Zero by 2050). Practically for farmers, this meant leaving 4% of arable land to nonproductive means, carrying out crop rotation, and reducing the use of fertilisers by 20%. Farmers’ immediate concerns centred on how the changes may reduce their competitiveness in the global market against importers who do not have to meet the same restrictions.
The seeds of discontent
Implementing the CAP strategic plans has come at a volatile time in farming. The compounding effect of proposed CAP changes and other EU-wide policies, the impacts of Russia´s war in Ukraine, and the cost-of-living crisis have raised additional disquiet in the farming community. Add to this the national agricultural policy changes from EU member states and the tractor engines are primed.
In 2022, Russia´s decision to block Ukrainian ports quickly halted Ukrainian grain from getting to export destinations. The Black Sea Grain Initiative, while it lasted, allowed for trade to flow through the Black Sea. The EU´s solidarity lanes provided safe passage for Ukrainian agricultural products to reach their export destinations.
But farmers were soon complaining that Ukrainian grain was flooding into the EU through these solidarity lanes, driving prices to well below market rate. After weeks of intensive negotiation, the European Commission announced it had struck a deal with Poland and other neighbouring countries to manage the issue. It was the first true test of EU solidarity in its support to Ukraine. And much of the goodwill generated as bordering countries accepted refugees in the early stages of the conflict was lost.
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Internally, the cost-of-living crisis has also negatively impacted the EU farming community. The EU’s commitment to maintaining affordable food for its citizens means that EU farmers are forced to keep their prices low. Farmers have argued this was a double blow, forced to reduce their sales price while experiencing increased costs of production through rising costs of energy, fertiliser and transport. Separately but relatedly, farmers have argued that the value of subsidies under the CAP has reduced in real terms as inflation increases.
Farmers also worry about the external threat posed by imports. In particular, there is growing unhappiness that the EU´s long-running negotiations with Latin America’s Southern Common Market (Mercosur) may be ratified, paving the way for large quantities of beef, as well as sugar and grains, to enter the EU at a competitive price. Other EU trade deals under consideration are also seen as a threat by EU agriculture. In the case of Australia’s erstwhile free trade agreement with the bloc, agriculture is the main impediment. And the argument offered by farming groups that others should sign up for the same rigorous EU environmental protections is a convenient cover for their other worries.
This week’s protests on the streets of Brussels were not isolated. Behind the scenes and across Europe, farmers are capitalising on the opportunity to protest agricultural policy. Unrest has been brewing amongst the farming communities for some time. And in 2024 alone, the protests have been plentiful.
Since 18 January, tractors have blocked motorways in the southeast of France, including eight motorways into Paris as farmers protest increased production costs and EU environmental regulations. Talks between France’s new prime minister, Gabriel Attal, and prominent French farm lobby group, FNSEA, reached a breakthrough on 1 February when highway blockades were suspended in return for halting the plan to reduce the use of pesticides and unlocking additional funding for the agricultural sector.
In Germany, the January protests by farmers over the roll-back of tax breaks for diesel blocked access to several major cities. Chancellor Olaf Scholz agreed to stagger the cuts until 2026. But given Germany’s budget crisis, it will be unlikely he will have much more to negotiate if tensions are raised again.
In the Netherlands, farmers have been protesting since June 2022 when the Dutch Government announced a proposed cut to the nation’s cattle herd by a third to redice greenhouse gas emissions. In reaction, farmers dumped manure and rubbish on roads and blocked the entrances to supermarket warehouses.
In Poland, the influx of Ukrainian grain has led to widespread protests from the agricultural sector. In November 2023, Polish farmers and truck drivers blocked roads to Ukraine. Farmers suspended these protests on 6 January 2024 after the EU agreed to write more cheques.
On 14 January, Romanian farmers protested the excessively high levies. This is in addition to their existing grievances about the influx of Ukrainian grain to the EU.
And elsewhere, Portugal, Spain and Italy have pledged to join the protests against the EU environmental rules placed on farmers, the rising costs of living, and the threat of cheaper imports from non-European countries.
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The EU (like any government or organisation for that matter) is undertaking a delicate balancing act. Between climate commitments, support for Ukraine and efforts to ease the cost-of-living crisis – farmers are only a piece of the political pie. However, tractors are disruptive, noisy and an effective protest method. With elections looming in June 2024, EU leaders know they must act fast to diffuse these protests and dissuade future ones.
On 1 February, the EU announced a recommendation that EU leaders delay the implementation of the CAP fallow rules (4% of arable land being left for non-productive purposes) for 12 months. At the same time, they announced that the Autonomous Trade Measures (ATMs) for Ukraine would be extended for the suspension of import duties and quotas on Ukrainian exports. The EU committed to reinforcing protections for sensitive EU agricultural products.
Whether these commitments will be enough to keep the tractors out of Brussels until June is yet to be seen. What is clear is that the CAP does not come for free. As hard as the change will be, farmers have a role to play in meeting the EU´s green ambitions and weathering the storm of the fallout from geopolitical events.
And with this clarity, we also see the reality. EU farmers will continue to benefit from the largesse of the CAP, the CAP will remain a significant component of the EU budget, and President Macron will still attend the Salon International de l'Agriculture (International Agricultural Show) in Paris each February. Given his efforts to ingratiate himself with French farmers, this year, Attal may also get an invite.
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