Australian observers are warning there’s a global cost to agricultural policy made in response to protest, as farmers in Europe, and now India, escalate their campaigns for better prices and fewer regulations.
For months, tractor blockades in France, Germany, Belgium and now Spain have brought highways to a standstill, amid growing resentment about rising costs, environmental policies and cheap imports.
Demonstrations have broken out again in India, less than three years after protests against changes to farm laws resulted in the legislation being repealed.
But foreign governments bowing to protest pressure could have ramifications for Australian consumers and farmers, according to Katie McRobert, the general manager of independent policy think tank the Australian Farm Institute.
“These are wicked [problems], they are complex … the best way to approach them is to look at how everything fits together to realise we are all part of a community and to identify those shared values,” she said.
Local protest, global impact
Ms McRobert said protests tended to focus on ideology and emotion rather than evidence, which was a risky foundation for decisions that affected global food supply.
“There’s a lot of regulation coming out of Europe that might be specifically focused on European supply chains, but has now been expanded to capture any corporations, industries or organisations that are domiciled in Europe,” she said.
“So, they are by default setting global standards, and that is not going down well with the rest of the agricultural systems, let alone farmers in their own countries.”
In a speech to parliament last week, European Union president Ursula von der Leyen proposed scrapping a plan to reduce pesticide use by 50 per cent by 2030 — saying it had become a “symbol of polarisation”.
“To move forward, more dialogue and a different approach is needed,” she said.
The move was welcomed by Copa-Cogeca, a lobby group representing 22 million European farmers, as “finally acknowledging that the approach was not the right one”.
Ms McRobert said in the past five years “prescriptive practices” dictating activity on farms had been the focus of Europe’s regulations.
“[Farmers] have been told how to farm and what to farm and they don’t necessarily see that there are good outcomes from these decisions that have been made in the European Parliaments,” she said.
“It’s not at all [surprising] that they’ve taken back to the streets again.”
Subsidised disadvantage
At the heart of the challenge for European policy makers was subsidisation, which Jared Greenville, executive director of the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) said distorted global markets.
“If you’re in a country which has a high level of subsidies … you’re paying more [for food] and have less choice,” Dr Greenville said.
“But if you’re in a country like Australia, what it can often do is depress world market prices … it means that our producers receive a lower price.”
Australian farmers were among the least subsidised in the world, Dr Greenville said, with just over two per cent of producer revenue coming from government sources.
By comparison, ABARES reported that in 2020, 61 per cent of a Norwegian farmer’s income was from the government. In Japan it was 46 per cent, and in the EU the average was 17 per cent.
Subsidies can take the form of direct payments from governments to farmers, or policies that distort market prices, which supporters argue improves food security, productivity, innovation and environmental outcomes.
But Dr Greenville said those goals were rarely achieved and instead subsidised farmers became inefficient and lost touch with consumers.
“[From] a global perspective, what we see is effectively there’s less food produced at a higher price,” he said.
“[Farmers] gradually fall behind and after a few years there is a really big gap between their cost of production and that of unsubsidised producers.
“They’ve become so unproductive the value of that subsidy gets dissipated away and so they’re feeling that they’re not getting a fair price for their produce.”
The Indian example
In 2020, farmers in India’s north-western state of Punjab erupted into protests over laws that some feared would undermine the minimum support price guaranteed to producers by the government.
Professor of sociology at Jawaharlal Nehru University in New Delhi, Surinder Singh Jodhka, said not all farmers or crops were supported by the price.
But those who do benefit from it are determined to hold onto it.
“This was introduced in 1960s when India was trying to ensure food security and develop a system of food distribution at the national level,” he said.
“The government of India encouraged farmers to produce food grains over other crops, for example, wheat and rice.
“If you were not able to sell it in the market you could always sell it to the government at the guaranteed minimum secure price.”
Dr Jodhka said the year-long protests that eventually spread to other regions catapulted farming into the national debate.
“Farmers do feel that they were able to push back and they are very happy about it,” he said.
“They are also confident that if government tries to do something like this, they can do it again.”
As fresh protests demanding a higher minimum price broke out this week, Dr Jodhka said life in rural villages, where 65 per cent of India’s 1.3 billion people still lived, was rapidly changing.
“[The government] realised that they cannot ignore [agriculture], but they’re still operating with this notion of welfarism … rather than thinking about the diversities of the agrarian situation and budgeting for investments in agriculture,” he said.
He said there was a social obligation, not just an economic one, to get the policy right.
“India has experienced famines where hundreds of thousands of people died on streets,” he said.
“People have starvation in their memory, they don’t want to give up on their land … that gives them a sense of security.”
Despite the risks of protests influencing policy, Ms McRobert said it was also dangerous to ignore the issues.
“When people are driven to protest, it is usually because they’re at the extreme end … it does demonstrate a level of frustration that is well beyond the norm,” she said.
“It’s beholden on policy makers to at least listen to what’s being said.
“But then you also need to go beyond the actual process itself and say, ‘So where are we trying to head together?'”
