Lesson from German farmers’ stir

Devinder Sharma

Food & Agriculture Specialist

DURING their protest against the government’s plan to scrap tax breaks on diesel for farm vehicles, German farmers used cranes to lift tractors. This was meant to demonstrate the fragility and vulnerability of agriculture, which continues to literally hang by a thread. This reminded me of a protest in France a couple of years ago when farmers hung dolls from trees outside the French Parliament to depict farm suicides and agrarian distress.

If the markets were efficient and benevolent, as corporate economists want us to believe, there is no reason why farming should be a loss-making proposition.

As tractors take over Berlin, many other cities in Germany — Cologne, Hamburg, Munich and Nuremberg — are also facing tractor blockades. Deviating from the modus operandi of earlier protests when tractors moved in a column, angry farmers are now blocking highways at many places and disrupting rail traffic. Throwing heaps of manure outside government buildings, furious farmers brought sheep outside the German Louvre museum in Berlin, with placards that read: ‘We do not want to end in a museum’.

While the protests have been going on for almost three weeks, a massive demonstration was organised in Berlin on January 15, to mark the eight-day deadline that farmers had set for the coalition government to respond. Although the government partially pulled back on agricultural diesel subsidies, farmers are still infuriated at the austerity measures that will eventually lead to the withdrawal of domestic support. The diesel subsidies alone amount to 900 million euros every year.

This will mean that most farmers would annually lose 5,000-10,000 euros; for some, it may be still higher, agitating farmers claim. “For our businesses, it’s a catastrophe,” a farmer from Bavaria was quoted as saying. Before the latest protest, EU Agriculture Commissioner Janusz Wojciechowski had pointed out that more than 1,000 farmers were quitting farming every day due to unprofitability. This is primarily because EU countries have continued with the legacy of former US Agricultural Secretary Earl Butz, who in the early 1970s had asked farmers to ‘get big or get out’. The EU prescription of ‘grow or die’ led to the demise of small farms. Later, the Washington-based International Food Policy Research Institute, too, prescribed the same flawed economic course as a solution to the crisis in Indian agriculture.

The emphasis on larger farms and industrial agriculture has brought the world closer to a climate emergency. While farmers are under attack for excessive greenhouse gas emissions (GHGs) emanating from the farming practices they were forced to adopt, no questions are being asked of the political parties, global institutes or banking establishments that pushed for intensive agriculture. With the focus on providing surpluses, and relying on the mistaken power of markets, farm incomes dropped and that led to a decline in the number of cultivated farms.

Farmers fear such drastic cuts will wipe out farming. While the Russia-Ukraine war led to a price increase for farmers, farm incomes had remained almost static prior to that. A report submitted to the German Federal Parliament showed that as many as 36,000 farms closed down in a decade, between 2010 and 2020, which comes to 10 farms per day. In neighbouring France, the agricultural census report (released in December 2021) points to a sharp drop in the number of farms — almost one lakh closed down in a decade. Against 4,90,000 farms in 2010, the number came down to 3,89,000 in 2020. In Europe, 5.3 million farms disappeared in 15 years (2005-20).

This is what happens when agriculture is left to the whims of politicians who call for policy decisions that suit corporate interests. When markets are unable to provide farmers remunerative prices, subsidies are given to cover the loss. This ensures protection to corporates, but the real cost is borne by the farmers. In America, more than 150 programmes are designed to dole out direct and indirect subsidies amounting to $30 billion per year. And yet, for most of the past few decades, farmers have suffered losses. In Europe, too, agriculture survives on subsidies and direct income support.

An interesting analysis by the US-based farmdoc daily has shown that in the past four decades (1980-2020), net returns as a share of the total economic cost of production reveal that US farmers have suffered losses for 33 years. If it were not for federal support, the remaining family farms in America would have collapsed too. In Germany, the income losses are compensated by subsidy support, including diesel subsidy. In India, a recent study by the Organisation for Economic Cooperation and Development (OECD) has conclusively shown that farmers have been incurring losses since 2000. Another analysis shows that in the case of paddy, except for Punjab, farmers across the country have been incurring losses or barely scraping through. In the Philippines, the National Anti-Poverty Commission has identified farmers and fishermen at the bottom of the pyramid.

The common thread is that agriculture in all these countries, and elsewhere too, is dependent on markets. If the markets were efficient and benevolent, as corporate economists want us to believe, there is no reason why farming should be a loss-making proposition. For rich as well as poor countries, markets have rendered agriculture as more or less a paralysing burden. The fundamental breakdown is primarily because of a broken financial system that sucks wealth from primary production up the value chain.

Whether it is in the US, Germany, France or India, farmers must realise that subsidies are not a solution to the farm crisis. Since agriculture hangs by a thread, the symbolism, too, has to change. We need a realignment that is permanent and leads to a new global economic awakening that focuses on assuring farmers a remunerative and guaranteed income. 

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