BRUSSELS, Belgium—On Monday, 4,800 farmers and 1,450 tractors gathered in protest outside the E.U. Headquarters. This week’s protest is the latest among farmers who are demanding emergency aid to recover from a crash in the price of their products.
The agriculture industry in Europe has suffered immensely due to three key events in the past two years.
The first key event happened on August 7, 2014 when Russia announced a ban on imports of Western food products. Specifically, the boycott targets meat, fish, fruit, vegetables and milk. Among the nations affected are the United States, Norway, Canada, Australia and the entire E.U.
The decision came in retaliation of sanctions imposed on Russia by Western nations over the Crimea dispute. The ban was supposed to last for one year, however in August 2015 the Kremlin added more European countries to the list.
The second key event occurred on April 1, 2015, when the E.U. ended their 31-year-old system of milk quotas. The quota, which was in place to protect from an overproduction of milk, was abolished in an effort to deregulate the industry and increase competition with international markets.
At the time, the E.U. Commission believed that the growing demand for dairy from China would prevent the “milk lakes” and “butter mountains,” as overproduction was deemed in 1984, from reoccuring. However at Monday’s protest members of the European Milk Board held banners that read “Europe is drowning in milk.”
The third key event was on June 12, 2015, when the E.U. Commission’s predictions about China were proven wrong. On that day China’s stock market bubble burst, which sent a large ripple through global markets.
Following the collapse, the currencies in many developing Asian countries have weakened and China has devalued their yuan. As a result, demand for products like European milk has gone down.
The consequences of these events are leaving European farmers in desperate situations.
About 22,000 farms in France have accumulated a total of 1 billion euros in debt and are facing bankruptcy. The E.U. is losing 5.5 billion euros in agriculture exports to Russia.
The dairy industry was hit particularly hard. Milk prices in Germany are currently under 28 cents per liter. The average price of raw milk fell 20% in the past year. In Belgium, one farmer notes that the wholesale price of milk is now 30% less than what he needs to break even on production costs.
With prices continuing to fall, farmers from all over Europe who used to have lucrative operations are now facing poverty.
Clément Lambillotte, a Belgian farmer, laments, “I’m young. I just took over my parents’ farm. But by the end of the year, there’s almost no money left in the accounts because of these falling prices.”
Audrey Le Bivic, a dairy farmer from France, echoed Lambillotte, “It’s impossible to continue like this,” she said, “I have no salary. My bills are higher than my earnings.”
The demonstration on Monday coincided with a meeting of E.U. Commission agriculture ministers who were discussing aid for the struggling farmers. Being considered was a 500 million euro emergency aid package to meet the protestor’s demands.
In addition, the E.U. Commission discussed increased and earlier advances on direct payments, bilateral free trade agreements with countries in the Middle East and the Americas and delivering more milk to the School Milk Scheme for schoolchildren.
The E.U. Commission also put forth the idea of using milk and other dairy products as aid for vulnerable groups amid Europe’s current refugee crisis.
The E.U. Commission’s Vice President, Jyrki Katainen, said that the aid package, “demonstrates that the Commission takes its responsibility towards farmers very seriously and is prepared to back it up with the appropriate funds.”
Katainen says the 500 million euros will be made available as soon as possible to the impoverished farmers.
– Celestina Radogno
Sources: BBC 1, BBC 2, BBC 3, Bloomberg, European Commission, The Guardian, New York Times, The Washington Post