December 19, 2023 - 4:00pm
German farmers are angry. Thousands of them descended on Berlin on Sunday and Monday, their tractors forming long queues in front of the Brandenburg Gate. They came to protest against austerity measures, warning leaders in the capital that there would be a “very hot January” with protests “of a kind the country has never seen before.”
Chancellor Olaf Scholz’s government is already in deep trouble. Its budget was recently ruled unconstitutional by the courts, blowing a €60 billion hole in the public purse. In the frantic search for savings, agriculture has been earmarked for an annual cut of nearly a billion euros. Farmers will no longer receive subsidies on agricultural diesel and tax exemptions for agricultural vehicles. Gisela Lörke, a dairy farmer from southern Germany, said this would cost her around €5,000 a year, “which is a huge sum when you only make €30,000 overall”.
If the government thought it could quietly get away with this because only 1.2% of Germans work in the agricultural sector, it was very much mistaken. The demonstration on Monday gives a glimpse of what is to come: loud and effective protest, with central Berlin effectively brought to a standstill as 6,600 farmers rolled into the capital in 1,700 tractors.
The situation was certainly heated yesterday. Minister for Food and Agriculture Cem Özdemir addressed the crowds, intending to strike a conciliatory tone. “I know you have come here to Berlin with enormous anger,” he began, but was drowned out when people continued to boo, shout, whistle and ring cow bells. Joseph Holz, one of the farmers in the crowd, called him a “hypocrite” who “strangles German agriculture”.
The government would also be wrong to assume that the protest was only about the latest cuts. From the outset, Monday’s demonstration was deeply political, with people calling for early elections and an end to the coalition government.
The ramifications go far beyond agriculture. The three-way coalition is already strained due to key policy differences. Now, several ministers clearly have grave concerns about the cuts in agriculture and, as discipline breaks down, many feel they no longer have to uphold the facade of unity.
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Subscribe“Politics can’t overrule physical limits,”
Nice to hear somebody actually say this. I fully expect this fellow to be tarred, feathered, and labeled a blasphemer against the righteous cause of NetZero, or perhaps he already has been given the speed of internet news.
K….Gonna go out on a limb here…but..
Gonna bet that anyone pushing net zero, less energy, get rid of fossil fuels in the next election is gonna get a kick in the teeth.Gonna bet that next year is going to see a lot of “populist” right types seize more power
I might stick my neck and bet that the coalition will break down before the end of Q1 2024.
Stick my neck out, I mean.
That too!
How much of that 60B budgetary hole is related to the explosion in benefits payments since 2015?
Just wait until the next election!
“In the frantic search for savings, agriculture has been earmarked for an annual cut of nearly a billion euros. Farmers will no longer receive subsidies on agricultural diesel and tax exemptions for agricultural vehicles. Gisela Lörke, a dairy farmer from southern Germany, said this would cost her around €5,000 a year, “which is a huge sum when you only make €30,000 overall”.
Cutting or eliminating such uneconomic subsidies is good policy on general principle. It is a shame that the Social Democrats only implement such policies when under duress, such as its budget being ruled unconstitutional.
I do hope Chancellor Scholz has the good sense to ignore or ride out these protests for unjustifiable special privileges by Europe and Germany’s agricultural lobby, although I will not be disappointed if he doesn’t, as farm lobhies are experts at whipping up atavistic sentiments to extort the taxpayer (just look at Europe’s disastrous agricultural policies).
You’re not wrong. Farm lobbies have been among the worst offenders when it comes to gobbling up subsidies and lobbying government for handouts. On the other hand, we all need food and unlimited international trade is no longer a given. It behooves all nations at this point to consider their own food supply and protect their own agricultural sector from international competition to a significant degree. The US does this despite being overwhelmingly the largest exporter of agricultural products. If you’re picking out useless items to trim a federal budget, I submit that farm subsidies probably aren’t even in the top fifty in terms of worthless crap that the government spends money on.
It is precisely that sort of atavism, primitivism, and peasant politics, or Blut und Boden nationalism (just look at the Netherlands) that agricultural lobbies (which represent for-profit businesses, just in the agricultural sector, and not virtuous, Calvinistic boeren) are experts at whipping up to agitate for uneconomic, harmful and quite transparently self-serving policies, such as endless subsidies, price “supports” (price controls, just price controls above the market price), cartelization of agriculture (again to drove up prices), and protectionistic restrictions on trade. Not to mention that all this nonsense is also used by extreme environmentalist primitivists.
If indeed there were no agricultural products to be imported in international markets, then all the subsidies, price supports, and other policies would be entirely superfluous, since in that case domestic agriculture would be a profitable economic activity on its own, without having to extort domestic taxpayers, domestic consumers, and impose on foreign producers.
I understand the rationale from an economic standpoint. I’ve heard it from economists and free trade politicians since I was old enough to understand the conversations. Simply saying that something is economically inefficient is quite fine, but that doesn’t mean the impacts fall evenly. Some sectors benefit more than others from free trade policies, while some are harmed. While economically efficient, widespread unemployment, inequality, and disruptions in the job market have consequences that go well beyond economics, which brings me to my second point.
Governments have many functions other than economics. They have to be concerned with civil order, food supplies, crime levels, defense, immigration, foreign relations, transportation, housing, unemployment rates, and I could go on like this all day. All these issues are interrelated with one another and it is not easy to separate one from the other. The real world is seldom amenable to ideological orthodoxy of any sort. Moreover, governments cannot assume a continuance of the status quo. What if there were a war and a foreign navy disrupted trade routes. What if a civil war broke out in America and the flow of agricultural products stopped and at the same time, the US Navy no longer protected trade routes from piracy? What if there was another pandemic? If domestic agriculture is tailored to economic efficiencies, it is very likely to be locked into a very limited range of goods that grow best in the area and can be cost competitive globally. This is fine under present conditions but may not be adequate in a time of war or other disaster. It behooves governments to plan ahead for possible crises before they happen. If the pandemic taught us nothing else, it is that sometimes it is worthwhile to sacrifice efficiency for resilience and stability. The world is changing, and I suspect these old arguments will gain you little purchase in the new normal.
Its the same in the UK farmers are being bankrupted ( dairy, horticulture, eggs etc) because they are not being paid a fair price for their produce. Supermarkets are importing food at cheaper prices from around the world and the government is supporting this policy. However, this policy is very shortsighted because every country must be able to feed its population. The days of being able to import cheap food will soon be over so cutting uneconomic subsidies may be a good policy in the short term but a disaster in the long term.
Protectionism is to Economics what Lysenkoism is Agronomy and Biology.
That is really very clever!