How farmer protests could influence US and EU politics
According to recent projections from the European Council of Foreign Relations, the next European Parliament will be more right-wing than ever, with anti-European populist parties likely to top polls in nine member states and come second or third in further nine.
According to the think tank, come June 2024, almost half of the EU parliamentary seats will be taken up by representatives outside the three main centrist groups, and a populist right coalition could hold a majority. This could lead to significant changes in EU policy, particularly where environmental issues are concerned.
Signs of a sustainable change from centrist-left to right-wing politics has been felt in recent national elections across Europe, with voters in Slovakia and the Netherlands placing right-wing politicians in power last fall.
Over in the US, Democratic Party president Joe Biden is increasingly likely to run against Donald Trump, who has emerged as the most likely candidate from the Republican Party to stand in the 2024 US presidential election.
On both sides of the Atlantic, farmer protests have galvanized right-leaning politicians. In Italy, the leader of the Lega party Matteo Salvini recently hailed farmers âwhose tractors are forcing Europe to go back on the follies imposed by the multi-nationals and the leftâ, while in the US, former president Trump – who is still campaigning in the Republican caucuses against his last challenger, Nikki Haley â has boasted about record-breaking federal aid provided to US farmers during his presidency.
To try and unravel the complex political and social landscape, DairyReporter reached out to Dr Joseph Glauber, a senior research fellow at the International Food Policy Research Institute, who spent 30 years at the US Department of Agriculture, including as chief economist from 2008 to 2014 when he was overseeing climate, energy and regulatory issues as well as ag forecasts and projections. Glauber also has a background as a trade negotiator, having served as chief agricultural negotiator in the Doha talks.
We asked him what are the major causes that have lead European farmers out to protest. He said that while there were some country-specific differences, several factors applied across the board.
âIf you look grain prices and oilseed prices, theyâve come down a lot over the last 18 months,â he explained. âSo farmers have seen cash receipts decline, which has raised concerns in the US as well as in Europe.
âBut on top of that, particularly in Eastern Europe, those countries that border Ukraine have had a lot of product ending up in their markets [since the war with Russia broke out, ed.]. Theyâve also had to compete with Ukrainian grain and other agriproducts for storage, as 2 million tons of grain per month was transported through the Solidarity Lanes. A lot of that was ending up, at least before the Black Sea Grain Initiative, in a lot of Eastern European countries. And so, prices there were even lower due to competition.
âThe war also led to a rise in energy prices and therefore input costs that have been felt throughout Europe, if less so in the US. These input cost rises squeezed margins, and when profit margins decline, farmers look at a lot of various causes to point their finger to. And thatâs precipitating a lot of unrest.â
And then thereâs pressure to address environmental sustainability, he added. âThe conversations that EU Member States are having and the [European] Commission is having in terms of sustainability standards and trying to reduce nitrogen emissions for example is what has precipitated a lot of farmer protests, particularly in Northern Europe â the Netherlands in particular, thereâs fear that that greenhouse policies could have a negative impact.â
A long way since the ‘tractorcade’Glauber said thereâs no question that European farmers have been more vocal in expressing their discontent compared to their US counterparts â though this may well be down to regional specificities. âIn the late 1970s, we had truckers that came into Washington to protest,â he said, referring to the âtractorcadeâ protests of 1978 and 1979, organized by the American Agriculture Movement in response to the 1977 Farm Bill that led to a drop of commodity prices to a level lower than the cost of production.
âYou just donât get that in the US. France by comparison has a long tradition of active protests, where one of the things to do is to block transit and roads. I suspect that this does get the attention of policymakers, though I donât know if it would in the long run.â
He insisted that US farmers had been less affected by the geopolitical unrest affecting their European counterparts in terms of income. âWhen we look at US farmers, they have been unhappy that their prices have declined over the last couple of years, but they really were coming off a record-high income,â he explained. âBut I donât think US farmers have seen quite the reduction.â
According to the US Department of Agriculture, farmer income is forecast to fall in 2024 by more than a quarter compared to 2023, more than 40% below the record-high in 2022 but just under 2% below its 20-year average. The expected drop-off is largely down to lower cash receipts but also higher production expenses and lower direct government payments, specifically lower supplemental and ad-hoc disaster assistance.
Glauber told us that US farmer profits are still looking relatively healthy. âThe projections this year is that farm income in the US will decline significantly from last year, but it still is relatively high compared to the last five years, and certainly to the last 10-year average of prices,â he said. âStill, I think that farmers are dealing with a lot of stresses. Input costs are a big part of that; environmental regulations are also playing a role here, as they are in Europe. There are also some protectionist impulses when people are looking at lower prices to blame imports from other countries.”
From America First to Alternative for Germany: Could protectionist moods change global trade?We asked how much of a leverage farmers have over politicians, given the global focus on food security but also the growing awareness of agricultureâs role in climate change. âThe questions is,â Glauber said, âwill policymakers re-think the regulatory side of things? Will they make adjustments to current policy paths, will they look to compensate farmers? That would all cost money, and a lot of funding is now going to other things.â
He highlighted that unlike the EU, where a common agricultural policy (known as CAP) applies for all members of the bloc, the US government has chosen a âvery different routeâ in terms of providing farmer subsidies to incentivise positive environmental actions. âThereâs criticism thatâs being leveled with that approach; that it just isnât that effective yet itâs expensive and doesnât yield nearly as much results as, say, a regulatory structure.
âThe big debate in international organizations now is about repurposing domestic support and taking support away from trade-distorting measures and putting it into more environmental-friendly path. The problem in the US is that thereâs not really talk of re-purposing support, but about adding additional support.”
“A lot of people feel that the so-called additionality – how much farmers do in addition to what they would be doing otherwise in the absence of these programs â is not all that great.â
He explained that Republicans were willing to back climate-smart programs, as long as the programs pre-dating the newly-proposed ones were not being taken away. So, if the US ends up with a Republican president, would there be appetite to scrap climate-smart agriculture programs? âA lot of farmers that receive those benefits are Republicans,â Glauber replied, adding that thereâs more of a regional split in opinion on that.
âSouthern US farmers, for the most part, have wanted higher support prices, and if that means losing the climate-smart programs, theyâd be comfortable with that,” he said. “In other areas of the country, particularly livestock producers have benefited a lot from climate-smart funding. So I donât think that would disappear.
âPolitically, Republicans realize that itâs not an easy choice.â
As for dairy farmers, regional differences apply, too. âDairy farmers go through cycles in terms of their costs. They saw very high feed costs in 2022 as maize, soybean prices went up to very high levels. Those in the western parts that arenât pasture-based farms saw their margins decline, so they havenât been particularly happy. For them, itâs all about what their feed costs look like and how strong dairy prices are.
âThen again, I think a lot of dairy farmers see these climate-smart programs as potentially helping.â
It could come down to how protectionist global politics turn out to be in the future â something thatâs seen as a genuine concern by Glauber. âThat would be a very dangerous path to go down,â he said.
âIf all of a sudden we see protectionist policies, what would that mean for a lot of markets?”
“I expect European producers would be hurt if world leaders were suddenly determined to be more protectionist. And we know Donald Trump has followed a very protectionist agenda in his first term, even talking now of putting in place across-the-board tariffs on imports, putting on 60% tariffs on China. I think that would be devastating for US agriculture.â
And yetâŠâŠthere are multiple reasons why many farmers are pro-Trump, he added. âHeâs enjoyed great popularity in agricultural states. And despite this trade war with China, farmers got bailed out with about $25bn in additional monies, given to them in compensation.â
That model is unlikely to be sustainable in the long run, he suggested. âI think if Trump were to come back and do that, itâs not going to be just China â it would be every country. And it would affect industries beyond agriculture. And I think at the end of the day, there would be a lot of backlash.â
Trump also appeals to farmers through his rhetoric against environmental regulation, Glauber added.
âMany farmers hold a view that the Democrats are trying to regulate their businesses and, right or wrong, thatâs the viewpoint.
âBut Iâve heard that more and more farmers are nervous about talk of a Trump presidency implementing this return to trade policy of years past. They are very nervous about that happening.â
A Politico analysisâ found that the farmer payments during the first three years of Joe Bidenâs presidency were nearly identical with the same period under Trump â and net income has improved under Biden. Whether that would be enough come November remains to be seen.
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