Perhaps yours truly is unduly skittish, or perhaps simply not sufficiently familiar with EU farm policies. But as we’ll discuss soon, a recent Financial Times editorial on farmers’ protests in Europe made me wonder if something is missing from my, and perhaps others’, perspective on the pressures intensifying on how societies provision themselves on a collective and individual level. Put it another way, the article bugged me and I’ve been puzzling out why.
Specifically, as the Financial Times’ headline whinges in the editorial, The rise of agricultural populism, a critically important group of suppliers is balking at the prospect of green/carbon-output-reducing reforms hurting their incomes. The pink paper concedes that even with large EU subsidies, farmers work hard for typically not very good pay levels, and that has already been under stress.
Now as an editorial, one would expect this piece to be aimed particularly at Serious People, as in the decision-making or at least influencing sort. But a striking result is the assumption of the “We are all adults here, these problems can be sorted out” tone underplays how the farmers v. climate policy fight may be a canary in the coal mine of intractable climate change issues. These current and upcoming choices are already difficult but are made even more so by living in a market/neoliberal society.
The Green New Deal and others who are seeking climate change action have done themselves and the planet a huge disservice via their rainbows and unicorns approach to policies. They have pointedly avoided the notion that sacrifices need to be made. The subtext is that if consumers merely make smarter choices, like buying EVs, using bicycles more often, installing heat pumps, insulating, and support investments like wind turbines and high speed trains, the worst will be forestalled. Admittedly, some do advocate more hair-shirt-y measures, like giving up on or reducing the consumption of beef, air travel, and indoor temperature control. Notice the huge hidden assumption: that consumers are well off enough to be able to make choices, as opposed to get by, and on top of that, they can afford higher costs, and/or to front big-ticket expenses that promise to offer a good return.
What the Green types have (as far as I can tell) chosen to ignore is the impact on livelihoods of aggressive climate change action. For instance, there’s a great deal of hand-wringing about Bitcoin energy consumption. Yet there’s a dearth of proposals to outlaw Bitcoin and severely criminalize its use. That seems to be due to bizarre deference to Mr. Market, as if speculation is more important than preserving the environment, along with perhaps a reluctance to throw people in the crypto sphere out of work. Similarly, no one is willing to very aggressively tax (say via super duper high landing fees) private jets so as to greatly reduce their use. Until the rich are willing to give up on their greenhouse gas spewing perk perks, it’s not hard to see why dull normals can be persuaded that climate change is a con.
The Green types are even less honest in discussing the impact of climate-saving policies on many workers. The talk up new green jobs. But most people do not want to be thrown out of work (or face such worsened employment conditions that their current employment becomes close to untenable) and then scramble to remake themselves. Even if they come out economically whole in the end, they face a great deal of stress and income pressure in between. And if they are carrying debt, that could mean bankruptcy, selling their house, or other major upheaval. Let us not forget that stress is bad
for your health and your relationships. The costs extend beyond the purely financial.
Those around long enough remember the promised benefits of NAFTA. Americans were told it would create new jobs. In fact, NAFTA shrank employment. The other flavor of happy talk around globalization is that everyone winds up net ahead, so policies can be devised to take from the winners and share with the losers. But I have yet to see any Robin Hoods in senior positions in government. The fallback to that is to blame those who wound up on the bad end of policy changes as deplorables, unwilling to move where jobs are (as if they can magically land them in cities where they have no contacts and have to front travel and lodging costs) To the extent there has been a policy response, it’s been “let them eat training” and only lately, poorly thought out protectionism.
Add to that, as social scientists have ascertained, the political center of gravity tends to move to the right in bad economic times. People are more concerned than ever with hanging on to what they have, which dovetails with conservative messaging. Some also wind up falling back on traditional structures like family and religious organizations. And since the 2008 crisis, those at the top have pulled away even as social safety nets have frayed and class mobility has collapsed. Intensified class and income disparity are not great foundations for advocating for or imposing costs on those lower in the food chain and expecting them to submit quietly.
Now it is not wrong to depict many in the so-called right of exploiting discontent of the downtrodden lower orders. But it should be obvious that they would not be able to do so if the supposed left were credibly attempting to watch their backs. And as we can see with climate change, the left has shown itself to be indifferent to the sacrifices it expects ordinary workers to make, and has done a terrible job of demanding even more from the carbon-hogging rich, much the less engaging in much more than virtue signaling displays themselves.
The spectacle of farmers’ protests against climate changes and environmental diversity polices spreading across Europe is reminiscent of the Gillet Jaunes protests….except the farmers collectively are crucial suppliers and at least for now also seem able to engage in collective action.
And despite the “Cooler heads will prevail” tone of the piece, recent headlines suggest EU officials are in considerable retreat. This seems particularly peculiar since members of the pink paper’s comment section maintain that farmers were consulted before various measures were proposed. The protests and the policy changes suggest otherwise….or alternatively, if they were “consulted,” they weren’t much listened to. These are from the Financial Times:
We have the conundrum in the EU, which I don’t pretend to understand, of substantial farm subsidies, on the order of €60 billon a year, yet the Financial Times agrees that most farmers find it hard to get by:
Some other sectors suggest farmers have always been coddled by the EU. Yet in all but the largest enterprises, farming at the best of times involves big risks and meagre rewards. Farmers say that in recent years input and borrowing costs have soared thanks to inflation and the war in Ukraine. Margins have been squeezed by retailers trying to hold down prices in the cost of living crisis. And they complain of being undercut by imports, including Ukrainian products as the EU has — rightly — thrown open its doors to support Kyiv’s economy.
Some of this may be due to the EU having higher standards for food production than the US. Some of the subsidies are to support exports. But many farmers are in the uncomfortable position of being laborers on their own plantations.
Despite acknowledging that many farmers are under enough duress that they are in no mood to take more, the pink paper exhibits elite disconnect:
As with other parts of the green transition, Brussels and EU states need to find ways to hold firm to the overall goals while offsetting the impact on the most vulnerable groups — by phasing in measures over time, exempting smaller farms, or offering targeted support.
Given the importance of food security, moreover, a broader debate is needed on where in the supply chain the costs of going green should fall: on farmers, on taxpayers through even higher subsidies, or on consumers and the food and retail industry.
At least the Financial Times does not resort to the insulting US “having a conversation”. But this is what it amounts to. In the end, the fact that the farmers have already forced a considerable walkback shows that at least for now, like bankers, they know they have sufficient control of socially critical resources to not be pushed around, and even demand concessions.
One way that might…might..force a bit more realism is conjoint analysis, where individuals are offered paired choices to reveal what their real preferences are. Here, having experts and then the media serve up in concrete terms the implicit choices being made might instill a smidge more realism and importantly, fear. Instead of bloodlessly talking about what a X degree increase in 15 years looks like, show a series of expected results, particularly local ones, if that happens, versus what the results are if the increase is only some smaller level. Then if most agree they would rather not have X, but some less destructive Y (still making clear that lesser evil is still evil), show them further what options they have to get there. If we are going to play the “markets and choices” game, the time is long past when 50,000 foot happy talk is adequate.
And while on the topic of the need for more realisim, consider the next part of the Financial Times story:
With the number of EU farms falling due to consolidation as younger generations sell up, more private capital probably needs to be attracted into farming — as is happening, for example, in the US — which can invest in technology and reap economies of scale.
Some governments will fret about rural areas emptying out, increasing the burden on housing and services in cities. Yet, given the difficulty of making a living from farming today, turning farms into more stable businesses owned by companies that can afford to invest might just help to keep more people on the land.
Huh? First, “more technology” likely includes “more fertilizer” when the US is finding that intensive use of nitrogen fertilizers results in toxic nitrates, which are producing cancer cluster in the Corn Belt. And even though Russia has been blamed for tight fertilizer supplies (in fact, the cause is sanctions and the refusal of the West to exempt the Russian agricultural bank from sanctions so lower-income countries can make purchases), ammonia production is highly energy intensive and ammonia plants in Europe and the UK have been closing as a result. From an written answer to a question posed to the EU Commission in 2022:
Half of European ammonia production plant closed
Spiralling gas prices have caused a decline in European ammonia production, thereby aggravating the shortage of fertilisers in Europe. CRU Group analysts estimate that around half of European ammonia production plant and 33% of nitrogen fertiliser plant has closed down as a result
The Norwegian producer Yara International ASA has reduced its ammonia production to around a third and other plants in Europe have also reduced or suspended their fertiliser production. According to analysts, it has now become much cheaper to import ammonia into Europe than to produce it. If gas prices remain high, further pushing up the cost of fertilisers, farmers will probably start to purchase less, limiting yields and cultivated areas.
Yours truly does not know how much, if any, capacity has been restored now that energy prices have moderated. But longer-term, higher energy prices, whether natively or as a result of higher taxes and fees, are necessary to deter use. Greener energy is not free; it has different resource costs, such as environmental degradation and toxic leftovers, than CO2-generating sources. Collectively, we need to go on an energy diet and no one wants to hear that.
But the more obvious sour note in the Financial Times extract above is that capital, which will almost certainly expect higher returns than owner-operators, aka farmers, do now, and can magically reduce labor content so as to also provide for better to pay to serfs, um, farm labor. Members of the Financial Times comments section were quick to call that out:
Yet, given the difficulty of making a living from farming today, turning farms into more stable businesses owned by companies that can afford to invest might just help to keep more people on the land.
Only someone who has never worked or even visited a farm would say this.
And would investment from a business rearrange the seasons to consistent units of work that can be evenly distributed across the year and be paused for holidays?
Stop pipes from bursting overnight?
Make calving and lambing occur only during weekday, working hours?
No salaryman will do the work required of a farmer.
Well we all know the enormous contribution Agri business has made to the building of European civilisation…Oh no, .. wait.
It is also a display of touching naivety to think that, once family farming has been taken over by corporate farming, the demands for subsidy will disappear. Business will leach off the taxpayer far more efficiently than the “patrons” ever could. In that respect at least, business is already far outperforming the traditional family farm sector as it sucks up the Lions share of subsidies.
There comes a point when Liberal economics becomes a pathology. This editorial is an exhibition of that pathology….
Humans have a tendency to go on tilt when faced only with unattractive alternatives. But the pretense that not acting is not tantamount to a choice increase the odds that outcomes will not just be bad, but the worst.