How much could the farmer protests cost Europe’s economy?

Euronews takes a deeper look at the farmer protests taking place in Germany, France, Romania, the Netherlands and Belgium – and explores how much it could cost Europe.

In order to put the current protests taking place across Europe into context, it is important to understand where it all started.
The history of the current protests can be traced back to the Green Deal (2019) which involved significant alterations to achieve climate neutrality. The purpose of the deal was to decarbonise and digitalise Europe’s economy. It suggested some serious alterations of policies with an objective to achieve climate neutrality by 2050.
However, the policy makers failed to include what is called the second-order thinking, ie its impact on farmers. The on-going turmoil has converged with a slowdown in all the major economies of Europe creating a the foundations of a mega crisis.

Among many of the proposed strategies, the Farm to Fork strategy introduced two key targets related to the agricultural sector of Europe:
• To cut pesticide and fertiliser use by 50%
• Make 25% of farming organic by 2030

Owing to the existential threat caused by the environmental degradation, the European Green Deal still aims to ensure the sustainability of biodiversity and ecosystems.

Recent developments
In November last year, EU politicians discarded the proposed bill of “Sustainable use of Pesticides” which was one of the eminent clauses of the Farm to Fork strategy. Although the bill was aimed at promoting the organic agricultural setup, it failed to see the light of day.

The backlash came not only from the farmers but also the right-wing politicians who believed that the bill could lead to a negative impact on the crop yields, thus disrupting the food production. The main agricultural group of the EU, COPA-COGECA, criticised the bill.

“Let’s not forget that this proposal was ideological from the outset, with no connection to the realities of agriculture, proposing unrealistic transitions without the necessary funding,” the group said. “Let’s not forget that all this polarisation could have been avoided and solutions found without the ideological obstinacy of a few decision-makers,” the group stated.
The current situation

In many parts of Europe, the protests have escalated into road blocks, reflecting the anger over the rising prices, low wages and the EU’s environmental regulations. The competition in the local food industry is further worsening the situation, leaving little hope for the farmers.

According to a CNBC report, the signs at the protest read: “When farmers are ruined, food has to be imported.” Another sign said: “No farmer, no food, no future.”

The plight of farmers is not just linked to the specific state policy measures but is also an attempt to defy the EU’s environmental regulations and sustainability vision related to the coming times.

The farmers in Germany are protesting against the government’s plan to cut diesel subsidies; the farmers in France are protesting against the the excessive regulations in terms of their agricultural activities; the farmers in the Netherlands are protesting against the government’s environmental plans, aimed at reducing livestock population in order to cut down emissions.

Impact of protests on Europe’s Economy
This commotion has the potential to not only disrupt the agricultural set-up of the region but also to disturb the transport sector responsible for delivering various goods, hence halting the overall supply chain and affecting the regional economy at large.

The aggressive demonstrations, clashes with police, nationwide shutdowns, gridlocks on roads and mass protests will have grave repercussions on the trade and manufacturing sector as well.

In addition, the farmers are now targeting the port areas with the aim of causing disruption to logistics infrastructure, impacting port activities. Recently, during one of the protests in Belgium, the port of Zeebrugge was blocked by farmers for up to 36 hours as part of the wider European demonstrations.

In the summer and autumn of last year, Europe had to grapple with extensive damage to forests and crops due to floods and wildfires. Consequently, many farmers lost their livestock and crops, and suffered serious financial losses.

Before Europe had the chance to recover from the economic repercussions, the farmers’ actions are further compounding the problems by burdening individual countries’ economic infrastructure and minimising the possibility of the agricultural infrastructure’s recovery.

The demonstrations have the potential to not only cause the decline of the national economic landscape but also to impact the economy at EU level. As the ECB says: “The eurozone economy will continue to be weak in the near-term but is expected to pick up momentum later this year.”

The way forward
In order to bridge the gap, the EU needs to come to an agreement to ensure fair prices for the farmers so that the transition to a green economy is smooth and steady.
Bearing in mind international competition, the farmers need to be given fair income security so that they, too, can benefit from the vision of the EU’s Green Deal.
Source: Euronews