Thursday

22nd Feb 2018

Why are European farmers unhappy?

  • How much are you willing to pay? It influences how much farmers receive for their products (Photo: EUobserver)

What do Vladimir Putin, drought, a viral disease and supermarkets have in common?

They are all factors that have to some degree contributed to the current state of agriculture in Europe - the topic of a special meeting of EU farm ministers on Monday (7 September) in Brussels.

Thank you for reading EUobserver!

Subscribe now for a 30 day free trial.

  1. €150 per year
  2. or €15 per month
  3. Cancel anytime

EUobserver is an independent, not-for-profit news organization that publishes daily news reports, analysis, and investigations from Brussels and the EU member states. We are an indispensable news source for anyone who wants to know what is going on in the EU.

We are mainly funded by advertising and subscription revenues. As advertising revenues are falling fast, we depend on subscription revenues to support our journalism.

For group, corporate or student subscriptions, please contact us. See also our full Terms of Use.

If you already have an account click here to login.

  • Russia's food ban is affecting prices (Photo: kremlin.ru)

Several thousand farmers are expected to protest in the EU capital while ministers discuss possible aid measures with EU commissioner Jyrki Katainen, who is filling in for hospitalised farm commissioner Phil Hogan.

The demonstration follows a summer of protests in several European countries, notably French farmers who disrupted traffic at the height of the tourist season.

But the causes of the current situation, which some call a crisis, are myriad – and it is not only the French farmers who have it bad.

Russia

One of the reasons for the farmers' malaise is geopolitics.

Following Russia's annexation of Crimea and support of separatists in eastern Ukraine, the EU imposed sanctions on several top officials. Russian President Vladimir Putin responded with an embargo on European dairy products, fruit, vegetables, pig meat, bovine meat, and poultry meat.

Initially, the damage was limited. Since the Russian ban was put in place in August 2014 the European “agri-food” sector has managed to compensate the losses to the Russian market by exporting elsewhere. In June, food exports were 11 percent higher than a year earlier.

However, such aggregate figures mask local and individual worries.

“We’re fighting for survival”, a Latvian farmer told news website Marketplace recently.

EU commissioner Hogan said recently that “particularly the Baltic States and the new member states” are hit hardest.

And with Putin having announced the ban should continue until August 2016, other countries have also complained.

Austria and Belgium, for example, have noted that the ban has affected their pig meat producers, while Bulgaria, the Czech Republic, Hungary, Poland, Romania, Slovakia and Slovenia recently urged the commission “to use all possibilities to stabilise the situation on the milk market”.

Milk quota

However, one option - reintroducing milk quotas - is off the table, Hogan has already said.

Part of the fall in the milk price was to be expected. The EU's three-decades-old milk quota ended in April 2015.

In January 2014, European farmers were paid an average of €0.40 per litre of milk. A year-and-a-half later, that price had dropped by 10 cents.

The drop was not uniform across Europe though.

French farmers experienced a drop from €0.39 (January 2014) to €0.30 (June 2015), but prices for milk are now lowest in the Baltic states: around €0.21 per litre in Lithuania and Latvia, and €0.23 in Estonia.

Therefore the price the French farmers received in June is “reasonable”, Hogan noted.

And with milk production increasing by 4.5 percent in 2014, “farmers themselves probably contributed to the particular glut that we have in milk at the moment”, Hogan noted.

Many farmers anticipated the end of the cap on how much milk they were allowed to produce, and started to increase their production – which has in part caused the drop in prices.

So farmers are also to blame for the price drop, but only collectively. Individual farmers obviously faced a prisoner's dilemma: do I also increase production and possibly help cause a surplus, or stay behind with the same amount to sell for a lower price?

Drought and disease

Other reasons contributing to price slumps are lower-than-expected demands in China, and a change in consumption patterns in Europe.

However, there are also several local factors contributing to sector-specific problems. Some of them will be discussed by ministers in Brussels on Monday.

Poland and Romania, for example, are suffering the consequences of a severe drought.

The Polish representative will tell his colleagues that his country expects a 25 percent drop in the average farmer household income as a result.

A position paper said that Poland will note “drought is a frequent occurrence, yet this year’s drought that took place during the summer vegetation season, is particularly severe. The drought covered almost the entire territory of the country”.

Meanwhile, Poland and the Baltic states are also suffering from an outbreak of African swine fever while Greek farmers are seeing several tax and other benefits disappear as part of a package of required measures in exchange for their country's international bailout.

Your fault too?

Part of the problem however, also lies with the general consumer.

That is to say, people who do not want to pay more for their groceries than they do now.

According to a July report by Begbies Traynor, UK “food suppliers and farmers are increasingly being squeezed by the supermarket price war”.

One farmer told the Guardian that he and his colleagues are scared.

"The supermarkets say, ‘You can’t match the price? Sorry, we’re going elsewhere.’", he said.

And then there is the complaint by French farmers that they are unable to compete with workers from eastern European countries.

The agriculture ministers have scheduled three hours and fifteen minutes on Monday to discuss all of these problems, and possible solutions. It's clear that a lot of factors are beyond their control.

EU says milk price still 'reasonable'

EU farm chief said there are “limitations” to what commission can do to help farmers hit by low milk prices and the Russia food ban.

Analysis

We are not (yet) one people

Talks on the next EU budget will start on Friday. Brussels wants to do much more than before – and needs a lot more money. But arguing about funds won't be enough.

News in Brief

  1. Juncker's right-hand man warns of 'institutional blockage'
  2. Greek parliament to open probe on PMs and EU commissioner
  3. May gathers Brexit ministers to hammer out UK position
  4. Tajani asks Juncker for all EMA Brexit relocation documents
  5. Hahn: EU to back entry talks with Albania and Macedonia
  6. UEFA signs deal to promote 'European values' at EURO 2020
  7. Belgian PM to host 11 EU leaders ahead of summit
  8. Tusk all but rules out pan-EU candidates in 2019 elections

Stakeholders' Highlights

  1. Aid & Trade LondonJoin Thousands of Stakeholders of the Global Aid Industry at Aid & Trade London
  2. Macedonian Human Rights Movement Int.European Free Alliance Joins MHRMI to End the Anti-Macedonian Name Negotiations
  3. Mission of China to the EUChina-EU Tourism Year to Promote Business and Mutual Ties
  4. European Jewish CongressAt “An End to Antisemitism!” Conference, Dr. Kantor Calls for Ambitious Solutions
  5. UNESDAA Year Ago UNESDA Members Pledged to Reduce Added Sugars in Soft Drinks by 10%
  6. International Partnership for Human RightsUzbekistan: Investigate Torture of Journalist
  7. EPSUMovie Premiere: 'Up to The Last Drop' - 22 February, Brussels
  8. CESICESI@Noon on ‘Digitalisation & Future of Work: Social Protection For All?’ - March 7
  9. UNICEFExecutive Director's Committment to Tackling Sexual Exploitation and Abuse of Children
  10. Nordic Council of MinistersState of the Nordic Region 2018: Facts, Figures and Rankings of the 74 Regions
  11. Mission of China to the EUDigital Economy Shaping China's Future, Over 30% of GDP
  12. Macedonian Human Rights Movement Int.Suing the Governments of Macedonia and Greece for Changing Macedonia's Name

Latest News

  1. Dutch MPs vote on ending 'Ukraine-type' referendums
  2. Corruption report: Hungary gets worse, Italy makes progress
  3. UK seeks flexible transition length after Brexit
  4. Commission defence of Barroso meeting leaves 'discrepancies'
  5. MEPs bar WMD and killer robots from new EU arms fund
  6. Canete gets EU parliament pension while still commissioner
  7. Bank of Latvia sends deputy to ECB amid bribery probe
  8. We are not (yet) one people

Stakeholders' Highlights

  1. Dialogue PlatformBeyond the Errors in the War on Terror: How to Fight Global Militarism - 22 February
  2. Swedish EnterprisesHarnessing Globalization- at What Cost? Keynote Speaker Commissioner Malmström
  3. European Friends of ArmeniaSave The Date 28/02: “Nagorno-Karabakh & the EU: 1988-2018”
  4. European Heart NetworkSmart CAP is Triple Win for Economy, Environment and Health
  5. European Free AlllianceEFA Joined the Protest in Aiacciu to Solicit a Dialogue After the Elections
  6. EPSUDrinking Water Directive Step Forward but Human Right to Water Not Recognized
  7. European Gaming & Betting AssociationGambling Operators File Data Protection Complaint Against Payment Block in Norway
  8. European Jewish CongressEJC Expresses Deep Concern Over Proposed Holocaust Law in Poland
  9. CECEConstruction Industry Gets Together to Discuss the Digital Revolution @ the EU Industry Days
  10. Mission of China to the EUChina-EU Relations in the New Era
  11. European Free AlllianceEnd Discrimination of European Minorities - Sign the Minority Safepack Initiative
  12. Centre Maurits Coppieters“Diversity Shouldn’t Be Only a Slogan” Lorant Vincze (Fuen) Warns European Commission