A Plan to Save European Agriculture or New Levies and Rules for Farmers

Normal business operations are no longer an option for European farmers and businesses if they want to avoid climate collapse and economic difficulties, says a joint report presented in the EU after seven months of negotiations among 29 organizations involved in the Union’s agricultural and food sector.

In short, this means that new rules, levies, and restrictions are coming for European farmers, who have expressed their anger on the streets of European cities in recent years. At the beginning of the year, German Chancellor Olaf Scholz also presented savings plans to fill a 17 billion euro gap in the 2024 budget. The plan was to reduce tax breaks for agricultural diesel and eliminate exemptions from state tax on agricultural vehicles, which sparked significant dissatisfaction and protests from German farmers who occupied Berlin with their tractors. However, after a month of protests by German farmers, who, like their Canadian and Dutch counterparts before them, took to the streets, the government decided to soften the announced savings plans, announcing the abandonment of the proposal to eliminate tax exemptions for agricultural vehicles and that they would gradually reduce tax breaks for diesel fuel used in agriculture. Even Agriculture Minister Cem Özdemir spoke against fully implementing the cuts, stating that ‘farmers have no alternative to diesel’.

Concessions Before Elections

Thus, Von der Leyen made various concessions to farmers before the June EU elections to calm them and to increase her chances of regaining the top position in the EU, which ultimately happened. Following her call, some ‘quick and dirty’ concessions to agricultural lobbies followed, which angered environmental NGOs and progressive lawmakers who deemed it ‘unsustainable’.

Now, after the elections, it is again possible to go after farmers and violate pre-election promises, as is often the case in political life, so Von der Leyen says that ‘more must be done to protect agriculture and make the agricultural food system more resilient and competitive, and most importantly – sustainable’.

Her priorities, she said, include ‘fair and sufficient incomes for farmers, agriculture that works for nature and with nature, and a system that works with incentives’.

Changing Funding Priorities for Agriculture

At the heart of the report is the question of how the EU allocates its agricultural subsidies. The CAP (Common Agricultural Policy) with an incredible budget of 378 billion euros between 2021 and 2027 has long faced criticism for disproportionately favoring large industrial farms. One of the most significant recommendations from the report is to better target this funding. Instead of payments being based solely on the area being cultivated, subsidies should be distributed according to genuine needs, encouraging environmentally friendly practices.

Recently, for Lider, Ivan Kopilović, owner of Agro Cibalae, spoke about the misguided policies of the CAP.

– It is about implementing the ‘from farm to fork’ strategy, or the Green Deal, designed before all crises, in a completely different environment. Given that the EU has a very sluggish system, it could not adequately respond to the challenges occurring in the world, and the biggest victims are agricultural producers. Namely, the EU, with the help of the CAP, wants to have the production of healthy and safe food in sufficient quantities at acceptable prices and has planned to reduce the use of mineral fertilizers by 20 percent, the application of pesticides and antibiotics by 50 percent, and organic farming that should cover at least 25 percent of agricultural land in member states. These are quite ambitious plans that, not counting the crises that have since erupted, did not take into account the catastrophic climate changes, which is why the CAP is a total failure – said Kopilović among other things at that time.

Marco Contiero, Greenpeace’s director of EU agricultural policy, has been particularly vocal about the shortcomings of the current system and has called on the EU to stop funding mega-farms that contribute to pollution and climate crises and to redirect funds to smaller farmers who are working on restoring nature and healthier food production.

The current area-based scheme has long been under fire, but significant change has proven slow and difficult. However, agricultural lobbies and other members have now agreed for the first time that income support should be ‘targeted at small and medium-sized farmers who make up the majority in the EU and who need help the most.’

On the other hand, this income-based program should not depend on whether farmers comply with additional environmental protection rules — meaning those that go beyond existing EU laws, such as nitrate pollution or habitat protection rules.

Instead, farmers using sustainable practices should be allocated a separate set of funds, managed by both agricultural and environmental authorities, and participants have also called for a ‘significant annual increase’ in environmental support.

Sustainable Food Systems

The next two elephants in the room were sustainable nutrition and meat consumption. Experts agreed that it is crucial to support ongoing reductions in the consumption of animal-derived proteins — e.g., meat and dairy products — in favor of plant alternatives. They also called for a review of EU food labeling legislation and addressed the marketing of children’s food while advocating for tax reductions and other social and fiscal incentives.

– Sustainable choice should become the default choice – states the report.

At the end of the previous term, the Commission was supposed to publish a framework for sustainable food systems to shift consumption patterns in that direction, but the initiative was postponed amid tense discussions.

Of course, the report could not omit emissions, stating that the agricultural sector is responsible for more than 10 percent of total greenhouse gas emissions in the EU, primarily from livestock. However, although the EU has committed to reducing greenhouse gas emissions by at least 55 percent by 2030, no targets have been set for agriculture.

According to the report,’the diversity and complexity of agricultural systems require tailored solutions, so it was requested that the EU set different emission reduction targets for different types of agriculture.

Regarding livestock farms, territorial action plans were proposed to ensure a fair transition in regions with a high concentration of livestock. This would foresee mechanisms such as voluntary buyout schemes — to reduce the number of animals or retraining programs for transitioning to alternative production systems focusing on young farmers.

What’s Next for Agriculture?

The real test will come in the next few months. European Commission President Ursula von der Leyen promised that the findings of this report would be incorporated into a new ‘Vision for Agriculture and Food’, which will be published in the first 100 days of her second term, starting in November. It remains to be seen whether this vision will lead to real, lasting change.

Agricultural lobbying groups Copa and Cogeca, historically critical of green reforms, cautiously welcomed the dialogue process. However, they urged the European Commission to consider the concerns of all stakeholders in the coming weeks. In any case, farmers are expecting changes, and consumers seem to be as well if all these plans from the report are ultimately implemented.