Farmer protests that have spread across the European Union in recent weeks have caught the attention of policymakers as producers grapple with increased environmental regulations and major changes in consumer demand.
Farmers are “fed up, but I'm very happy with the fact that they were fed up,” Irene Tolleret, a member of the European Union parliament, said at USDA’s annual Agricultural Outlook Forum. For decades, farmers were losing negotiations over EU environment policy, she said.
Tolleret, a winegrower in southwest France, cofounded the European Food Forum, a nonpartisan platform for European Parliament members to debate food and agriculture policy. She is a member of the parliament’s Committee on Regional Development and a substitute member of the Committee on Agriculture and Rural Development.
The EU's policy development process needs to be revamped, Tolleret said, “with the human farmer at the center of what we do, because they are the ones that are going to deliver the sustainability and the targets.”
Europe’s Farm to Fork strategy for slashing agriculture's environmental footprint involves 24 pieces of legislation. “Some of them are good and the farmers like it, and some of them are not that understood,” Tolleret said.
Farmer protests in Italy (AP Photo/Andrew Medichini)In the face of the protests, European Commission President Ursula von der Leyen recently withdrew a legislative proposal that sought a big reduction in pesticide use on the continent. Von der Leyden gave up on the Sustainable Use of Pesticides regulation proposed as part of the Green Deal she announced in 2020
Tolleret noted that the EU’s Common Agricultural Policy, Europe’s equivalent of the U.S. farm bill, is the main way the EU is driving change in farming practices. One-quarter of a farm’s direct payments on the CAP are dependent on farmers taking additional environmental or animal welfare measures that aren’t required by regulations.
She also called for the establishment of common, global metrics to measure soil carbon and health so progress across countries can be compared.
Tolleret said it’s in the best interests of both the United States and the European Union to cooperate on food policy, much as they did in developing COVID-19 vaccines. “We have to do the same thing for everything related to global health,” she said.
One of her U.S. counterparts, Rep. Jim Costa, D-Calif., used a virtual appearance at the event to call for the U.S. and EU to work with the United Kingdom to agree on a “common sense agricultural policy” that will meet increased global demand for food in a sustainable way.
“We obviously need to be sustainable, but we need to talk about how we are sustainable in a way that takes into account climate change and takes into account the best farm management practices,” said Costa, a senior member of the House Agriculture Committee.
He said the European farmer protests showed regulations may not have been “well thought out, notwithstanding the good intensions.”
Ted McKinney, CEO of the National Association of State Departments of Agriculture, who attended the session with Tolleret and Costa, told Agri-Pulse the trans-Atlantic dialogue “no matter how far apart we might be, is essential.”
“The philosophical differences are just almost alpha to omega, but I think we can get there,” he said.
McKinney, who served as USDA’s trade undersecretary during the Trump administration, said that EU policymakers are learning “that perhaps including more farmers … into the Farm to Fork policies might have negated what we're seeing in terms of tractor blockades in Europe.”
Some 800 farmers are disappearing every day in the European Union, which lost 3 million between 2010 to 2020, and livestock producers are dealing with declining consumer demand, according to Andrea Porcella Čapkovičová, an analyst with the European Commission.
Smaller producers in the livestock and dairy sectors will continue to be under pressure, she said at the Ag Outlook Forum. “There will certainly be more farmers lost. I would hope in the next 10 years there would not be another 3 million,” she said.
In Europe, beef and pork consumption are falling, and dairy products are expected to gain a larger share of animal protein consumption over time, even though dairy production also is declining.
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Dairy products currently account for 34% of the EU’s animal protein consumption, a share that is projected to grow to 37% by 2035, even though milk production actually is projected to decline slightly over the same period, she said. The big bright spot for dairy producers is growth in cheese consumption, which is offsetting declines in demand for other milk products.
UK lawmaker: British farmers wary of U.S. trade
Getting a trade agreement with the United Kingdom may require overcoming the concerns of British farmers.
Barry Gardiner, a Labor Party member of parliament since 1997, said at the Ag Outlook Forum that UK livestock producers fear they would be left unprotected during trade talks.
“Our farmers are afraid of a trade negotiation with the U.S., because we know that farming is important to you, and we also know it’s not important to our trade negotiators,” he told the forum audience.
It’s not just the EU: California’s Prop 12 has economic bite
The Proposition 12 animal housing law is adding about $300 million per year to grocery costs in California, and the cost could be closer to $400 million or about $10 for each resident, UC-Davis economist Dan Sumner said at the Ag Outlook Forum. The law regulates sow housing in the supply chain for all pork sold in the state.
“Most Californians, by the way, didn’t demand crate-free pork before the proposition. They could have; it’s in the market, the industry would have provided it, no question. We didn’t do that,” he said.
EverAg economist Steve Meyer said pork producers have had to decide whether it’s worth complying with Prop 12 requirements.
“When I did the numbers back four years ago, I was telling our clients ‘Do not do this for less than $6 to $8 per pig for at least five years.’ I would tell them $10 or $12 now, and don't do it unless you get a contract for at least five years,” he said. “And if they won't pay you that, then just walk away from it.”
U.S. farmers probably OK for 2024, but 2025 looms, economist says
A leading ag economist told Ag Outlook Forum attendees that U.S. farmers probably have enough cash after several good years to make it through a downturn in commodity prices in 2024. Next year could be another matter.
Farmers have seen “exceptional levels” of farm income the last couple of years, said Nate Kauffman, a senior vice president for the Kansas City Federal Reserve and its top expert on the agricultural economy. “Many producers still, despite this expected decline in farm income, are in a very, very strong position.”
Nate Kauffman, Kansas City Federal ReserveAs evidence of the relatively strong position farmers have been in, banks in the Kansas City Fed’s region reported last year that none of their ag borrowers are on a watch list, which is unusual, Kauffman said.
“If by chance we were to get another year, maybe not '24 but in ’25, where you see another reduction in farm income, and a similar percentage decline in working capital, now we're starting to get into the territory that we were in agriculture between 2016 and 2019, and we know that those were not strong years,” Kauffman said. Working capital has been declining sharply for the last several years.
The Kansas City Fed’s region comprises Colorado, Kansas, Nebraska, Oklahoma, Wyoming, and portions of western Missouri and northern New Mexico.
Farmers who make large equipment and land purchases will be paying much higher interest rates, but many producers have been paying cash for land in recent years. Nationally, 51% of ag land purchases from 2021 through 2023 were in cash, versus 39% through loans, according to AcreValue.com, a website that tracks ag land transactions. The method for the remaining 10% of the transactions was not known. In Iowa during that period, 75% of the transactions were in cash. In California, 63% of the purchases were cash.
“What people are doing is taking no debt at all or less debt to maintain that level of cash flow,” said Jackson Takach of Farmer Mac, a secondary market for agricultural credit.
Maryland farmer calls for common standards on carbon
Carbon metrics are a challenging issue in the United States, not just in Europe.
Trey Hill, the owner of Harborview Farms near Rock Hall, Maryland, said at the event that new, commonly accepted standards are needed to replace the array of carbon measurement and verification methods now being used by offset and inset programs.
“I'm working with four different verifiers now in the regenerative space,” Hill said. “Each one has a different set of standards, which is fine, but it makes marketability very difficult.”
He added that differing tests also make it difficult for farmers to determine how good their soil health really is. “We need standards for soil health,” Hill said. “It's very difficult to get a baseline on my soil health. I mean, in almost 15 years we've gotten 10 different soil tests and all of them say something different.”
One barrier to farmers participating in certain carbon programs can be technology, said Alabama farmer Kyle Bridgeforth. Precision agriculture equipment or other technologies are often necessary for farmers to participate, but can be cost-prohibitive for farmers, he said.
“If you're someone that only farms on the weekends or a smaller shareholder farm, it's really hard to go out and buy the subscriptions and the advanced scale technology to capture what's needed to participate in these programs,” Bridgeforth said.
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