German farmers' anger overshadows agriculture fair

Chickens strut and cluck, piglets play under heat lamps, a huge bull is led by a nose ring into a box lined with fresh straw. At Berlin's Green Week in, the world's largest agricultural and food trade fair, farmers want to show their best side.

But at this year's fair, the mood is not entirely positive. The memory of a weeklong protest that saw tens of thousands of angry farmers block roads with tractors across Germany are too fresh. That protest was spurred primarily by a government proposal to abolish tax rebates for diesel fuel used in agriculture.

"I can't remember farmers expressing their displeasure with politicians like this since the fall of the Berlin Wall," said Joachim Rukwied, President of the German Farmers' Association, summing up the mood at the start of Green Week.

Germans love cheap food

The diesel subsidy cuts may have triggered the recent protests, but the problem runs deeper. Industry-wide, agriculture is highly subsidized, and has not been able to support itself for many years. On many farms, almost half of farmers' income comes from subsidies, primarily from the European Union. That creates a lot of frustration.

Compared to the rest of Europe, Germans spend very little on food. According to the Federal Agriculture and Food Agency, in 2022 Germans spent an average of 11.5% of their income on food purchases. Only in Ireland, Luxembourg and Austria do people spend less. In comparison, Italians pay 14.4% and the French 13.3% of their income on food.

Discount supermarkets dictate prices

One reason for the low prices in supermarkets is the power of retail groups. Smaller suppliers have disappeared in recent years, while discount food outlets have grown bigger. Edeka, Rewe, Lidl and Aldi dominate the German supermarket sector, dictating prices to food producers. Those who can't deliver cheaply disappear from the retailers' shelves.

At the bottom of the supply chain are farmers, who are often paid less than it costs to actually produce the milk, meat, grain and vegetables. At the same time, legal requirements for animal welfare, to combat climate change and for species protection have grown considerably in recent years.

"Agriculture cannot meet all those requirements and produce the cheapest food at the same time. There is a gap that needs to be closed," says Martin Schulz, Chairman of the German Farmers' Association.

A kilogram of meat for 40 cents more

For years now, experts have been looking at ways to close this gap. After demonstrations in Berlin in 2019, when about 40,000 farmers protested their precarious situation, two commissions were set up. One studied the future of agriculture, and the other looked at how farmers raise animals.

The additional costs of changes to improve animal welfare were estimated at €3.6 billion ($3.9 bio) per year, up until 2040. To shift the burden of these costs from farmers, the experts suggested making animal products more expensive. Raising the price of meat, for instance, by 40 cents per kilogram. The proposals were not implemented.

According to Federal Agriculture Minister Cem Özdemir (Green Party), the proposed changes were too comprehensive, and inspired too much resistance to be implemented. The Green Party politician has been in office for two years and now has plenty of experience with what doesn't work. "If you want to block a proposal, you can always find every possible reason why it's not possible. I've heard it all," he told a press conference this week.

However, Özdemir now sees the farmers' protests as an opportunity to actually make meat gradually more expensive. Rather than 40 cents a kilogram, Özdemir suggests a "Tierwohl-Cent" a small surcharge that could be levied directly at slaughterhouses and passed on to farmers. For this to be implemented, the Finance Ministry would have to draft a new law. But so far, Finance Minister Christian Lindner and his neoliberal Free Democrat party (FDP) have so far opposed an animal welfare levy.

The end of cheap meat?

"The majority of people want more animal welfare, climate protection and species conservation, but they often don't shop that way," Özdemir explained to the journalists on Tuesday. He argued that a mandatory price hike could be transformative. In other words: If there is no more cheap meat, no one will be able to buy it.

Christoph Minhoff, Managing Director of the Federation of German Food and Drink Industries (BVE), derided this approach as "ideologically underpinned paternalism." Minhoff used the start of Green Week to launch a broadside against Özdemir and the entire center-left government, saying it could not dictate to consumers what they can buy, or tell farmers to produce products that will not sell. "More and more new ideas, one on top of the other," said Minhoff. "We don't want politics to decide what is in our fridge."

Less sugar, salt and fat

This also applies to the new nutrition strategy that Agriculture Minister Özdemir has just launched. Among other things, the policy aims for a healthier diet in canteens and daycare centers, as well as less fat, sugar and salt in processed foods. However, these ingredients carry flavor, and they make production cheaper. Replacing them would ultimately make the products more expensive.

The food industry has reacted defensively. Minhoff argues that more regulations, as well as higher energy costs, higher personnel costs and more bureaucracy, are making Germany "rapidly" less attractive as a business location.

According to a BVE survey, only 10% of companies are planning to expand their investments in Germany, while 43% want to reduce them and six percent are planning to stop investing in Germany altogether. "The money will be invested abroad in future," Minhoff predicted.

Most farmers do not have this option. At the Green Week expo, Farmers' Association president Rukweid said that farmers would continue to protest if the government did not give in on agricultural diesel subsidies. "I want to be very clear: if this is not withdrawn, then the farmers will return to the streets to make their justified concerns heard." Rukwied said farmers' associations in other European countries have signaled their backing. "They offer to come to Germany to support our protest. A lot of things need to be adjusted in agricultural policy, so the solidarity is there. And there are also plans to protest in the individual EU member states."

This article was originally written in German.

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