Europe’s New Herd Mentality
Shifts like Co-Op's are now taking place Europe-wide. After the EU cut back its sugar subsidies, one third of the land growing sugar beets has gone out of production. Most EU countries have also dropped the particularly absurd subsidies for beef, which paid farmers once for each head of cattle, again for each animal that was slaughtered, and a third time to export the beef abroad. Since the end of this triple-dipping, some of the least productive livestock farmers (often those with poor grazing land and dependent on expensive grain for feedstock) have dropped out. Livestock numbers in Ireland, Scotland and Germany have gone down, while beef imports from Brazil and Argentina are creeping up. In France, milk production is getting shifted from the less productive south to the richer pastures of Brittany.
Countless family farms in Brittany provide the milk for some of France's most famous and competitive products. While artisan cheesemakers ship their Brie and Camembert to the gourmet stores of Paris and London (and, increasingly, Moscow and Shanghai), powerful dairy conglomerates based in the region have come to dominate the multibillion-dollar global cheese and yogurt trade. "The old system was very easy and very perverse," says Luc Morelon, spokesman for Brittany-based Lactalis, Europe's biggest cheese and dairy group. Most of Europe's dairy giants like Campina or Nordmilch were subsidy hounds, exporting bulk milk powder at a price guaranteed by the EU. Yet now that its subsidies have been cut by 88 percent, Lactalis is doing better than ever before. It sells its Président-brand cheese and butter in 165 countries and gets 55 percent of its €9 billion turnover abroad.
Naturally, the new system has winners and losers. High world prices for grain are great for wheat farmers like Paetow, but hellish for livestock farmers whose costs for grain-based feed have skyrocketed. Large farms find it easier to plan and invest, while small farms are under pressure. But it's not just the big farms and conglomerates that are entering new markets. In Bavaria, Erhard Schiele took over his family's vegetable farm and discovered he could make better money growing herbs. He has even developed his own machines to dry his crop of parsley and dill. Today, he has many neighboring farmers delivering their herbs as well, which are then shipped as far away as India and Japan. In the Italian city of Parma, the 171 small family companies that form the Consortium of Parma Ham have translated their tradition into a €2 billion global business, appealing to a growing number of gourmets in the developed and emerging markets. Exports to the U.S. alone soared by 24 percent last year. Slow Foods, the Bra, Italy-based organization promoting artisan foods and local production, says its members are capitalizing on growing demand for regional foods and traditionally made specialty products—a niche market to be sure, but a growing one that is proving that farmers can stick to tradition and still survive.
Of course, the shift is a culture shock to many. "I shouldn't have to invest, I should be supported," says Samuel Maréchal, a 34-year-old mustard seed farmer, working his family's 74-hectare farm near Dijon, France. He says it was all much easier in his father's day, when prices were fixed and income was predictable. These are the people who still support José Bové, who has continued to bang the antiglobalization drum. Bové ran as a far-left independent candidate in the 2007 French presidential elections. "Agriculture and economic liberalism are not compatible," he tells NEWSWEEK. "The citizens are not willing to accept the transformation of farm products into market products just because it is convenient for some. The people are more and more against the establishment of a global agricultural market." While it's not at all clear that's the case, its true that many more "will farm long after every economic signal tells them to stop, and that will cause grief," says Jack Thurston, founder of Farmsubsidy.org. For now, high prices are delaying the tough decisions. But one EU official estimates that another 3 million of Europe's 13 million remaining farmers will give up by 2012.
Will Europe keep up the pace of liberalization? Some of the most destructive policies, like the high tariffs that restrict imports from developing countries, are still in place. Much depends on France, which has always managed to block reform until now. And so it may be a modern-day French revolution that Sarkozy has become the first French president to call for a major reform of the subsidy system. Speaking earlier this month at the Paris Farm Fair, he told farmers they must become entrepreneurs and not just work for subsidies. But in the same breath, he also called for new "community preferences" and "true market stabilization policies," which can only mean more regulation. This underscored how politicized agriculture still is. But the growing benefits that Europe's farmers are reaping from markets and trade, now that they're sowing their competitive oats, may be what keeps José Bové and his like on the fringe.
With Antonio Oliveira in Paris And Jacopo Barrigazzi in Milan
© 2008
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Member Comments
Posted By: Jberthelot @ 03/20/2008 7:19:09 PM
Comment: I have just added euro instead of the ??? :
The two authors give a false picture of the economic and political situation of the EU agriculture, based on two non representative cases of agribusiness farms and on the EU Commission's biased data on export subsidies.
1) If the present high agricultural prices are a bonanza for the EU-27 farmers (the income per agricultural worker has increased by 5.4% in 2007 after 3.3% in 2006), the subsidies still account for the bulk of their income. In France in 2006 the subsidies accounted for 83% of the disposable income of milk farms, 135% of that of bovine meat farms and 127% of that of "great crops" farms (cereals, oilseeds, pulses and sugar beets)
(http://agriculture.gouv.fr/sections/mediatheque/periodiques/notes-et-etudes-economiques/notes-et-etudes-economiques-n-25).
2) Despite the sharp drop in formal export subsidies, the level of EU dumping has not dropped as the increased domestic subsidies benefiting also to exports has more than compensated the lower formal export subsidies. Already, during the period 1995-2001, the average euro 1.673 billion in domestic subsidies to exported cereals have been 3.5% times higher than the average export refunds of euro 477 million. For poultry meat the euro 243 million in average domestic subsidies to poultry meat exports have been 3 times larger than the euro 83 million in export refunds. The euro 288 million in domestic subsidies to pig meat exports have been 2.3 times larger than the euro 128 million in export refunds. The euro 938 million of domestic subsidies to exported meat have also exceeded the euro 859 million of export refunds. And the euro 1.030 billion of domestic subsidies to dairy products exports have represented 60% of the euro 1.717 billion in export refunds. Knowing that most of these domestic subsidies to animal products exports were subsidies to domestic feed grains (http://solidarite.asso.fr/home/textes2006.htm).
3) On the political level, the main EU federation of farmers' organisations, COPA-COGECA, maintain an inflexible stance to defend the right of EU agriculture to feed the EU population and thus oppose a large reduction of agricultural tariffs and domestic subsidies (http://www.copa-cogeca.be/Main.aspx?lang=en&page=HomePage)
Posted By: Jberthelot @ 03/20/2008 7:11:24 PM
Comment: The two authors give a false picture of the economic and political situation of the EU agriculture, based on two non representative cases of agribusiness farms and on the EU Commission's biased data on export subsidies.
1) If the present high agricultural prices are a bonanza for the EU-27 farmers (the income per agricultural worker has increased by 5.4% in 2007 after 3.3% in 2006), the subsidies still account for the bulk of their income. In France in 2006 the subsidies accounted for 83% of the disposable income of milk farms, 135% of that of bovine meat farms and 127% of that of "great crops" farms (cereals, oilseeds, pulses and sugar beets)
(http://agriculture.gouv.fr/sections/mediatheque/periodiques/notes-et-etudes-economiques/notes-et-etudes-economiques-n-25).
2) Despite the sharp drop in formal export subsidies, the level of EU dumping has not dropped as the increased domestic subsidies benefiting also to exports has more than compensated the lower formal export subsidies. Already, during the period 1995-2001, the average ???1.673 billion in domestic subsidies to exported cereals have been 3.5% times higher than the average export refunds of ???477 million. For poultry meat the ???243 million in average domestic subsidies to poultry meat exports have been 3 times larger than the ???83 million in export refunds. The ???288 million in domestic subsidies to pig meat exports have been 2.3 times larger than the ???128 million in export refunds. The ???938 million of domestic subsidies to exported meat have also exceeded the ???859 million of export refunds. And the ???1.030 billion of domestic subsidies to dairy products exports have represented 60% of the ???1.717 billion in export refunds. Knowing that most of these domestic subsidies to animal products exports were subsidies to domestic feed grains (http://solidarite.asso.fr/home/textes2006.htm).
3) On the political level, the main EU federation of farmers' organisations, COPA-COGECA, maintain an inflexible stance to defend the right of EU agriculture to feed the EU population and thus oppose a large reduction of agricultural tariffs and domestic subsidies (http://www.copa-cogeca.be/Main.aspx?lang=en&page=HomePage)
Posted By: Aargh @ 03/20/2008 2:38:10 PM
Comment: "some will farm long after every economic signal tells them to stop" : as a customer, I do buy local product I know do not contain GM
contrary to the lesson your article professes, customers are more and more willing to defend traditional farming, placing their preferences towards clean, organic produces rather than merely thinking in terms of 'competitive'. We have witnessed the damages of junk food on health and society, many I know are very sensitive to the issue of GM food, crops diversity, agro-industries side-effets...