European agricultural workers have found themselves mistreated by their own authorities. Amid the slumping economy with skyrocketing diesel fuel prices and no access to Russian fertilisers, the governments chose to plug the budget holes at the farmers’ expense. The latter orchestrated a major backlash.
The EU is going through a period of intense farmer strikes that started late last year. Early this year these have grown in both scale and efficiency.
The conflict involving German farmers peaked last week as they managed to partially retain tax breaks for diesel fuel from the government. Earlier, Polish authorities had to hammer out a compromise with local farmers too. Next in line are the French farmers that are adamant about their right to lower fuel prices and reduced competition with imported counterparts.
‘Until the recent geopolitical events both French and German agriculture had been rather privileged compared to its Russian counterparts. Government subsidies, higher standards of living in rural areas, easier access to fertilisers and advanced technology all boosted the appeal of agricultural businesses and economic sustainability of national farmers,’ says Marina Anokhina, associate professor of corporate governance and applied innovation studies at the Plekhanov Russian University of Economics. But then things took a sharp turn for the worse. The economic falling-out with Russia that affected the power industry and the fertiliser market rocked European economies, with Germany slipping into a recession.
‘Reduced imports of Russian mineral fertilisers, lower availability of Russian fuel sources and the breach of global agricultural value chains have revealed the significance of Russia’s agricultural resources that have proven to be essential to the efficient operations of agricultural systems in advanced nations, in particular, Germany and France,’ Anokhina points out.
Amid an ongoing energy crisis, an inflation hike and growing costs, European authorities had to adopt the kind of policies that turned out to be unpopular among agricultural workers. ‘Their governments were forced to take steps to whittle down costs, change the structure of imports and exports affecting agricultural businesses and overregulate the industry that undoubtedly had an adverse effect on the efficiency of agricultural production and shattered food sovereignty,’ says the expert.
In Germany, 10,000 farmers rode 5,000 tractors into Berlin last week in what became the largest-ever agricultural protest rally. People were outraged by the government’s decision to curb tax breaks for diesel fuel that had been in place for seven decades. To add insult to injury, the move came amid a painful crisis that had seen diesel fuel prices surge over the last two years. In lieu of cheaper Russian crude oil and petroleum products, Germany has to import more expensive oil and diesel fuel from other producers.
In 2022, German diesel fuel prices hit a 50-year high. Even in the wake of the 1973 and 1979 oil crises as well the 2008–2009 financial crisis, the fuel prices did not soar at such a rate. Sure enough, in 2023, the diesel fuel prices decreased, but they are still considerably higher compared to 2020 and 2021.
Why would the German authorities choose to scrap the tax breaks that had been out there for 70 years? The answer is simple. In 2023, Germany slipped into a recession, with the national GDP taking a 0.5% dip. The country posted a huge budget deficit the government is currently trying to plug at all costs, including cuts to the agricultural industry.
‘The German government scrapping diesel fuel subsidies and abolishing car tax exemption represented the harshest steps compared to other sectors of the German economy, which sparked farmer protesters. This policy may lead to many farms going bankrupt and agricultural production taking a dip, which will inevitably increase food prices and exacerbate the current economic plight further,’ Marina Anokhina explains.
This resulted in the kind of farmer protests that made German authorities reconsider and cave, despite the initial claims that they were out of money. The farmers managed to partially retain their tax breaks, but the government vowed to implement certain cuts without scrapping them altogether.
The events were followed by the announcement of a six-day train driver strike slated to take place between 23 (24) and 29 January. Thousands of operations will be cancelled. The train drivers’ demands include a three-hour cut to their working week, higher wages and a one-time €3,000 reimbursement due to a high inflation rate. Last year saw two cautionary 24-hour strikes followed by a three-day strike in early January. This week we are witness a fourth strike, this one being large-scale. The German authorities barely have any other option but to take a step back.
The French farmers embarked on a series of strikes last September. Unlike the Germans, the French traditionally view strikes as a popular method of protesting. But this time the economic woes the EU’s largest economy had been going through over the past two years spurred social unrest in Germany.
As for the French farmers, on Monday, they once again blockaded the highways and set up the barricades. The strike commenced on 18 January, and the farmers are set to keep striking ‘throughout the week and however long it takes us to prevail’.
The farmers want the authorities to recognise the significance of their jobs an denounce the government’s agricultural policy as the one rendering them uncompetitive. Specifically, they are protesting agricultural imports, restricted irrigation water use, higher diesel fuel prices, limitations associated with environmental protection and rising production costs. The French Ministry of Agriculture, Agrifood and Forestry has agreed to postpone the rollout of a new bill supposed to regulate the agriculture. The authorities are concerned over the possibility of a rising new Yellow Vest movement.
‘France is one of the world’s largest agricultural nations. The biggest concern their agriculture is currently facing is the soaring irrigation costs. This may spell serious trouble for winemaking, the sugar industry and poultry farming due to heightened taxation, the large-scale introduction of green farming principles and an overall imbalance to the EU policy,’ says the expert.
On top of France and Germany, sweeping farmer protests have been a major issue in Poland, Romania and the Netherlands over the past year. In other words, farmers in at least five EU countries are irate over the lowering standard of living and declining wages.
The Polish truckers were blockading Ukraine border crossings between 16 November and 23 December 2023. In early January, they resumed their strikes. Polish authorities had to concede to the protesters. First, the embargo on Ukrainian produce will be indefinite. Second, the authorities scrapped the plan to increase the agricultural tax rate. Third, they retained preferential liquidity loans and vowed to subsidise corn farming.
Overall, European farmers have been mostly successful in achieving their goals, boosting the odds in favour of the French farmers. The key for them is to walk their talk and avoid folding in a couple of days’ time.