You come at the king(s) you best not miss... edition #6- EU Ag Newsletter

When we last left our story, EU Ag Edition #5, German farmers had their ?? tractors crowding the streets of Berlin as its 4 million residents and visitors were enjoying their mulled wine from collectible mugs, buying their beautiful hand-crafted ornaments, skating ?? around the Zehlendorf rink, and enjoying special chocolate treats. The protesting farmers raised the carnival atmosphere by spraying manure ?? and gnarling traffic on most of the capital's major streets. "Sch?ne Feiertage!" indeed! ??

They came at the kings, and they missed.

-- I'm surprised Olaf Scholz and the governing coalition did not see this coming. The timing, the announcement, the stagecraft, were completely wrong. Within days of the tractors crowding downtown Berlin, Scholz announced the proposed cuts to diesel subsidies would be rethought. And all this hassle and drama for a 1B€ budget impact. Which given the scope of the shortfall hardly seems worth the headaches. (Does no one remember 2019?!?!?! German farmers do not PLAY when it comes to driving their tractors to Berlin.)

I don't think the coalition purposefully came at the kings ??????. I think it was sort of an accident. Note what happened next:

The proposed "rethink" was kind of insane and tone-deaf. ??

• Phase-in the reduction of diesel benefits over three years. (Initially, the Gov promised to abolish these tax increases,)
• Expect farmers to transition to ELECTRIC TRACTORS ??
• Cut vehicle tax exemption for vehicles (trucks) used in Agriculture. ??

Because this is 2024 and the world is basically a seething dumpster fire ?? of crises. You know what happened next:

Que an enormous, coordinated strike across most major towns in Germany. Including ?? truck drivers, farmers ????, train workers ??... probably some other people jumped in just to get in on the action. As the collective action mounts it looks increasingly like a general strike. Strike leaders pledge to widen the action if the government does not concede by Monday 15 January.

The policies and suggestions at the heart of this show how bad it can go when people with little understanding of farmer balance sheets impose farm policy. Leaders in liberal cities like Berlin chide farmers for not adopting Electric Tractors. Or otherwise slowing down the green transition.

Electric Tractors - are you serious?

• Electric tractors cost double a conventional tractors.
• It is hard to actually acquire an electric tractor, there are not many produced each year.
• Parts and maintenance facilities are not present in rural areas for electric tractors. Ask any farmer when their tractor is most likely to break down. Always when they need it most, and they can't afford to wait for parts to be delivered from far away.
• New electrical generation is coming from coal-fired power plants. As green activists have moved against ??nuclear power (after a 60-year record of operating safely and cleanly in Germany). And the Russia-Ukraine war has cut the supply of natural gas. -- Where do you suppose the power for the new electric tractors would come from? --?? Coal - yes indeed, good'ol coal.

??The end of the traffic light coalition??

This crisis is highlighting a more basic shift happening in German politics. The traffic light coalition is breaking apart, and the right is rising.

Why it is called the traffic light coalition?

• ?? Alliance 90/ The Green Party - (Bündnis 90/Die Grünen)
• ?? Social Democratic Party - (Sozialdemokratische Partei Deutschlands)
• ?? Free Democratic Party - (Freie Demokratische Partei)

The economic minister Robert Habeck (??), has said he does not support the measures against the farmers. But he also is calling for a broader debate about what to do about the pressures on the agriculture sector. Farmers are facing rising costs for all inputs but are unable to price those higher costs along to customers because prices are being set by outside forces. And they are forced to try and produce more while small farms keep disappearing.

Federal Minister of Finance Christian Lindner (??) is showing empathy for the protests and announcing that he will attend the demonstrations next week. “For many years, I have observed very critically that politicians are trying to interfere in agricultural businesses,” he stated on public broadcaster ARD."

Chancellor Olaf Scholz (??) supports the upholding of the raising taxes on the farmers. However, even he and his spokespeople know they will need to find different solutions to plug the budget gaps.

This is just one of many issues showing the fragmentation of the traffic light coalition. But since this is an Agriculture newsletter, we are going to stay in our lane.

??Rise of the Blues! (AfD) Alternative für Deutschland??

The coming European parliamentary elections this summer and the district votes in 8 German states this June will test the political waters. But it's the September votes, in three eastern states: Thuringia, Saxony, and Bradensburg, that could overturn the coalition. The far-right AfD (??) is on track to win in the East. If this happens, it will shake Berlin and the ripples could have implications across Europe.

.. And, (not to make it too tidy a package) .. but guess which party is giving its 100% support to the farmer protests? - Yes - AfD.

Not for nothing there is a troubling amount of pretty messed up signage making its way into these farmer protests. And the German domestic intelligence in the state of Thuringia has warned that far-right extremists are seeking to use these farmers' protests for their own ends.

"Stephan Kramer, president of the Office for the Protection of the Constitution in Thuringia, told Berlin's Tageszeitung newspaper that right-wing extremists had "steadily and consistently tried to infiltrate any form of legitimate citizen protest."

Kramer said the aim was to establish a stronghold in civil society and "present themselves as the true representatives of the people."

It was "not really a surprise" that farmers' protests should be used, Kramer expanded. "Each emotional topic is and will be suitable for this strategy and would be used."

In response to such comments, Joachim Rukwied, chairman of the State Farmers Association for the state of Baden Württemberg, told the broadcaster RBB Inforadio on Monday that "we will ensure we are not infiltrated" by such groups."

quote used from dw.com - here: Thuringia intel chief says danger of far-right infiltration

In other news... Future of Ag Strategic Dialogue coming in January:

Jan 23 - Ag ministers will begin: "Strategic dialogue on the future of agriculture in the EU"

"At the EU Agri-Food Days conference on 6 December 2023, President von der Leyen confirmed that this strategic dialogue would start in January 2024. She called to overcome polarization on issues such as the reduction of pesticides and fertilizers, arguing that it was possible to reconcile competitiveness and the preservation of nature.

The Commission's ambition is to bring all the players in the food chain to the table. Not only producers and processors but also other stakeholders, including civil society. This shows the Commission's willingness to tackle the issue not only from the angle of agriculture but also from that of food in general."

Four thematic questions were already put forward by President Ursula von der Leyen at the EU Agri-Food Days:

1. How can we give our farmers, and the rural communities they live in, a better perspective, including a fair standard of living?
2. How can we support agriculture within the boundaries of our planet and its ecosystem?
3. How can we make better use of the immense opportunities offered by knowledge and technological innovation?
4. How can we promote a bright and thriving future for Europe's food system in a competitive world?

In view of the above, and to enable the Council to prepare for this dialogue, the Presidency proposes the following questions for an initial exchange of views:

1. What are the conditions needed to enable EU farmers to continue to supply food and raw materials and to generate a decent income, in a sustainable manner?

2. In the context of this strategic dialogue, which aims to depolarize the debate on agricultural issues, which themes would you like to highlight?

3. What results do you expect from this strategic dialogue?

I'll keep monitoring this and update you in the next newsletter

Thanks for reading! As always the opinions I write in this newsletter belong only to me and are not representative of any country, company or organization.