Displeased ranchers have taken to the lanes over the European Union. But how critical is the rural division to the bloc’s economy? Euronews takes a closer see.
Among their complaints, ranchers censure the cost-of-living emergency, fuel charges, natural control, burdensome bureaucracy, unjustifiable competition and free exchange bargains.
The apparently facilitated development, which has as of now come to nations like Germany, France, Italy and Spain, has caught Brussels off protect and put the Green Bargain beneath genuine political weight ahead of the following decisions to the European Parliament.
Ursula von der Leyen, the plan behind the Green Bargain, has responded by freely singing acclaims to ranchers, celebrating their backbone, commitment and financial commitment, and promising to pay more prominent consideration to their concerns.
Farmers “work hard every day, to produce the quality food we eat. For this, I think we owe them appreciation and thanks and respect,” the European Commission president said earlier this month while announcing the withdrawal of a contentious pesticide law.
“Issues have escalated in recent years. Our farmers deserve to be listened to. I know that they are worried about the future of agriculture and about their future as farmers.”
Here’s what you need to know about agriculture in the EU.
A small but vital sector
Agriculture is one of the world’s oldest means of production, dating back 12,000 years, when pre-historic civilisations switched from nomadic hunter-gathering to farming in permanent settlements. In the millennia that followed, agriculture acted as a major force of progress and helped develop many of the European cities we know today.
But with the advent of the Industrial Revolution, agriculture began to gradually recede in prominence as countries moved heavily towards manufacturing, and later, services.
Today, the sector represents a tiny share of the EU’s economy: according to Eurostat, agriculture contributed €215.5 billion to the bloc’s gross domestic product (GDP) in 2022. In relative terms, this means 1.4% of total GDP, a proportion that has remained stable over the past 20 years.
After selling its many products on the markets, the sector reaped more than €537 billion in 2022, with €287.9 billion coming from crops, such as cereals, vegetables, fruits, wine and potatoes, and €206 billion from milk, pigs, cattle, poultry and eggs.
France was the biggest seller that year, earning €97.1 billion, followed by Germany (€76.2 billion), Italy (€71.5 billion), Spain (€63 billion) and Poland (€39.5 billion).
Production costs were hefty at €316.7 billion in 2022, an increase of almost 22% compared to the previous year. The surge was mainly driven by Russia’s invasion of Ukraine, which sent prices of energy and fertilisers soaring to record highs.
Heavy concentration
An estimated 8.6 million people work in the agriculture sector, accounting for 4.2% of the EU’s employment. Romania (1.76 million) and Poland (1.46 million) are by far the largest employers. However, these numbers do not provide the full picture because harvesting is a seasonal activity that employs many people under temporary, part-time contracts. When taking these particularities into account, Eurostat puts the labour force at 17 million people, more than twice the headline figure.
The sector is male-oriented and ageing: a vast majority of farm managers are men (68.4%) and above 55 years of age (57.6%). The Netherlands has the most pronounced gender imbalance, with only 5.6% of farmers being female, while Latvia and Lithuania are the closest to achieving a 50-50 equality ratio.
All these farmers work across 157 million hectares of agricultural land, which is in turn split into 9.1 million holdings. But this distribution is starkly uneven: about 52% of agricultural land is controlled by 4% of all farms, those larger than 100 hectares. By contrast, small-sized farms, those below 5 hectares, use only 6% of all available land, despite representing 40% of all holdings.
This heavy concentration of land reflects the industrialisation of agriculture, where a few corporations afford to deploy advanced technologies, machinery and methods to produce crops at a great scale and sell at a global level.
Billions in subsidies
Agriculture is a risky business that is at the mercy of weather events, volatile demand and foreign competition, making it difficult to earn profits and attract investments. This explains why agriculture is one of the most heavily subsidised industries in the EU, despite its minuscule contribution to economic growth.
First established in 1962, the Common Agricultural Policy (CAP) is a massive programme of state aid that aims to ensure European farmers receive a minimum, stable income and can compete across borders. For decades, CAP was the raison d’être of the common budget, taking up more than 60% of all spending. Today, it accounts for one-third.
The CAP allocates €264 billion for the 2023-2027 period, chiefly devoted to two lines of action: €189.2 billion for income support, the direct payments that compensate farmers, and €66 billion for rural development to tackle the challenges of impoverished areas.
Direct payments are, crucially, not linked to the amount of crops that farmers produce. Brussels argues this link would incentivise over-production to obtain a larger share of subsidies and upend the market. Instead, payments are rolled out according to hectares (farmed land) and the respect for biodiversity, animal welfare and health rules.
The CAP is one of the most talked-about elements of EU policy and has received continued criticism for, among other things, its unbalanced distribution (about 80% of the budget ends up in the hands of 20% of farmers), its questionable effectiveness (farmers’ incomes remain 40% lower compared to average EU wages), and the commercial distortion caused vis-à-vis the World Trade Organization (WTO).
Methane profusion
Another recurrent accusation levelled at the CAP is its weak enforcement of environmental standards. This is because agriculture is a significant driver of pollution, accounting for more than 10% of the EU’s greenhouse gas emissions.
The European Environment Agency (EEA) credits these emissions to three sources:
CH4 (methane) from enteric fermentation, which refers to the digestive process in ruminant animals such as cattle, sheep and goats.
N2O (nitrous oxide) mainly from the use of nitrogen-based synthetic fertilisers.
CH4 (methane) from the management and disposal of manure.
Although the agriculture sector is subject to the EU’s overarching goal to gradually slash greenhouse gas emissions and reach climate neutrality by 2050, the reduction achieved so far has been extremely limited.
In fact, between 2005 and 2021, the EEA estimates agricultural emissions increased in 13 member states, with Estonia shooting past the 30% mark. Based on current projections, the agency predicts a modest decline of 4% by 2030 compared with 2005 levels, which could widen to 8% if additional climate measures are put in place.
This slow pace is particularly worrisome given that at least 25% of global warming is driven by methane, an odourless gas that is 80 times more harmful than CO2 in the first 20 years after being released into the atmosphere. Meanwhile, chemical pesticides commonly used to maintain crop yields are a factor behind biodiversity loss, poor-quality water, degraded soils and pest resistance, and have been linked tochronic illnesses.
Road to self-reliance
In reaction to the COVID-19 pandemic, the Ukraine war and the energy crisis, the European Commission has embraced “strategic autonomy” as a guiding philosophy to reduce costly dependencies on unreliable suppliers.
Luckily for Brussels, agriculture is a sector well advanced in that regard.
The EU has acquired self-reliance (meaning it can satisfy all its domestic needs through domestic production) in a wide range of goods we consume on a daily basis, such as wheat, olive oil, tomatoes, apples, peaches, cheese, butter, beef, pork and poultry. (For others, like rice, sugar, oilseed and vegetable oil, imports are still very much needed.)
This has allowed the bloc to become a commercial powerhouse on global markets: in 2022, the bloc exported €229.1 billion in agricultural products and imported €195.6 billion, leading to a comfortable surplus of €33.4 billion. The most valuable EU export was beverages and spirits, bringing in €39 billion.
