Good morning from New Economy Brief.
Getting stuck behind a tractor is an inconvenience usually reserved for narrow country lanes. But recently it has become a common occurrence in several European cities, with queues of tractors blocking roads in Paris and dozens blaring horns outside the Palace of Westminster. There are many reasons why farmers have been protesting across Europe, from cheap imports to nitrogen regulation (Politico has a handy rundown of the various protests and their causes here). But why are these seemingly separate movements all springing up now? And what do they say about things like supermarket profits and climate change? This week, we attempt to provide answers, and some possible ways to help agriculture and food production cope with an increasingly precarious world.
--
Why are farmers protesting?
The issues facing farmers vary from country to country. Belgian farmers, for example, are angry about nitrogen regulations, after a Dutch government crackdown on farm emissions. But there are some common themes. Energy and input prices are incredibly high following two years of higher inflation, extreme weather is becoming more common and retail and agrochemical companies are profiting while farmers get squeezed. The latest UK protests, coordinated by Save British Farming and Fairness for Farmers of Kent, blame cheap and poorly controlled food imports, weak trade deals and new sustainable farming policies.
Is this a green issue? As with most culture war issues, it depends who you ask. Some call the wave of protests a “net zero revolt”. However, analysis by Carbon Brief found that many had limited or no connection to climate change. In fact, environmental groups including Friends of the Earth and Greenpeace have issued a statement in support of farmers’ protests in France, and joined protests, citing the hardships smaller farmers face and the need for a just farming system that compensates for the costs of transition fairly. In the UK, Environmental Land Management farm payments schemes, often simply called “Elms”, have been particularly contentious. The schemes aim to promote sustainable farming, ‘rewilding’ projects and climate change adaptation. However, many farmers and farming groups have simply called for more government support with the transition to Elms, and do not oppose them in principle. Vicki Hird, the Wildlife Trusts’ Strategic Lead on Agriculture, says although Elms have their issues, many problems for farmers lie in the wider food system. Hird calls for “stronger retailer and supply chain regulation (including not ditching the Groceries Code Adjudicator) and new, better routes to market so farmers have a choice of who to sell to”.
The Ukraine grain glut. In the EU at least, farmer protests have even become a foreign policy issue. After Russia invaded Ukraine, the EU removed customs duties and quotas on Ukrainian grain imports and rerouted some shipments blocked by Russia via Poland and Romania. This caused a sudden, large supply of cheap Ukrainian grain that undercut producers across Europe, causing friction between Ukraine and its allies. Last month, the EU agreed fresh curbs on Ukrainian imports following farmer protests.
--
Who owns the food market?
While the cost of living crisis rumbles on and farmers often get as little as 1% of food profits for their produce, some in the food industry are doing very well indeed. According to a report by Global Justice Now, well over 50% of recent price rises in the UK, US and Australia are related to corporate profit increases. The report reveals the food industry’s increasing concentration over recent decades: “While 25 years ago, ten corporations controlled 40% of the seed market, a series of mega-mergers means that today just four – Bayer, Corteva, Syngenta, and BASF – control more than half. Together, they also control more than 60% of the world’s agrochemical market”. Likewise, just four companies control 70% of the world market in agricultural commodities, including grains, meat, and sugar. According to Oxfam, 62 ‘food billionaires’ were created between 2020 and 2022. Large suppliers, able to exercise market power, can exploit shortages to generate exceptional profits for themselves.
The supermarket problem. Retailers also wield huge power over food producers. According to organic farm and vegetable box company Riverford, 49% of British fruit and veg farmers fear going bust in the next year, with 75% of farmers putting much of the blame on supermarkets. The campaigners say supermarkets change their mind about buying produce (sometimes with up to £25,000 worth already grown) and make them wait up to three months for payment (illegal in the EU). The result is unpredictable income and large-scale waste. Meanwhile, supermarkets still make bumper profits.
--
Climate and the future of farming
An increasingly unpredictable climate and regular extreme weather is another huge problem for farmers’ livelihoods . According to the World Economic Forum, soybeans, olive oil, rice, potatoes and cocoa have been hit hardest. Costly energy and extreme weather caused most of the rise in UK food prices over 2022, according to the Energy and Climate Intelligence Unit.
--
What are the solutions?
From climate change to monopoly power, farmers’ issues are incredibly complex. On a national level, there is scope to make supermarkets treat farmers better. Riverford’s Get Fair About Farming campaign calls on them to accept five principles: buy what they have committed to buy, pay on time, commit to long-term relationships, agree on fair specifications (such as size and shape of vegetables), and pay what they agreed. Central government could make this happen by changing the Grocery Supply Code, as a petition recently debated in Parliament suggested. The new Basic Income for Farmers campaign is proposing that farmers receive a basic income to insure them against extreme weather shocks. More locally, people are increasingly taking the food system into their own hands and bypassing the supply chain by growing their own food. Movements like Right to Grow want to make this easier. It wants councils to let communities grow produce on “unloved public land” and to provide free, accessible maps showing all suitable places. The idea is gaining traction – Hull passed the UK’s first “right to grow” motion last year. The problems facing farmers intersect with some of the biggest issues of our time: the climate crisis, broken markets, inequality, the cost of living crisis, trade agreements – even war. These can’t be solved overnight, but at least on a local level, there may be some small reasons to be cheerful.
Private lenders reject Ghana debt relief deal. Ghana’s bondholders, including a group of Western asset managers, have rejected a deal to restructure $14bn of its sovereign debt. Read last week’s New Economy Brief to learn about the causes of, and solutions to, the global sovereign debt crisis.
Stopping tax avoidance in British Crown Dependencies and Overseas Territories. The UK Anti-Corruption Coalition has released a report with Tax Justice UK on the ‘painfully slow’ progress in setting up public registers of beneficial ownership in Britain’s Crown Dependencies and Overseas Territories. These public registers will shine a light on tax avoiders who hide their identities through shell companies, allowing proper scrutiny of secretive financial flows.
The cost of benefit conditionality. The New Economics Foundation’s (NEF) Sam Tims explains how the government could save up to £4bn by changing benefit conditionality. Universal Credit currently pushes people towards any accepting job in any industry, but giving claimants more time to find better-paid work that is more suited to their skills and ambitions is likely to lead to higher wages, and therefore more tax revenue and less social security spending for the government in the long term.
The economic burden of Long Covid. Cambridge Econometrics has produced a briefing on the costs to the UK economy of ‘Long Covid’ – a long-term condition that affects 3% of the population. Their models suggest this could reduce GDP by £1.5bn and destroy around 140,000 jobs each year by reducing people's ability to work, with the impacts increasing if future prevalence were to rise.
