Europe’s Green Deal Has Been a Raw Deal for Farmers

(Bloomberg Opinion) -- When the European Union embarked on its Green Deal, Paule Lucht had good reason to believe that the initiative would benefit his family’s small organic farm, located in the former East German state of Saxony. The Luchts generate solar energy, grow diverse crops, make space for fauna to flourish, use no chemical fertilizers or pesticides, and sell locally — all crucial for supporting biodiversity and combating climate change.

Yet when new green rules for agriculture started to take effect in 2023, his faith gave way to frustration — driving him to join a surging protest movement that threatened to shift Europe’s politics in a dangerous direction.

To apply for the subsidies on which his farm depends, says Lucht, he had to spend dozens of hours submitting detailed electronic maps and documentation – including soil readings irrelevant to his organic operation. Saxony’s glitchy portal crashed during regular working hours, forcing him to toil late into the night and on weekends. Because his farm extends into neighboring Thuringia, he had to navigate that state’s completely different application software, too. For his efforts he received about 29,000 euros, significantly less than in previous years.

“It’s horrible,” he says. “It’s so far removed from what farming should be.”

Lucht’s experience illustrates the latest in a litany of unintended consequences arising from the EU’s Common Agricultural Policy. Established in the 1960s to ensure postwar food security, it initially guaranteed farmers a minimum price for as much as they could produce, generating vast surpluses that skewed markets worldwide and nearly bankrupted the bloc. Starting in the 1990s, it switched to an income-support payment per hectare, which curbed overproduction but inflated the cost of land. As a result, all but the largest, most efficient farms — and the occasional high-end boutique operation — remain dependent on CAP subsidies, which comprise nearly a third of the regular EU budget.

After Europe’s mass climate demonstrations of 2019, policymakers refocused on agriculture’s environmental impact. Alongside pledges to double organic farming and sharply reduce pesticide and fertilizer use, they tied income support to a longer list of eco-friendly practices and offered incentives for so-called eco-schemes, such as fallowing extra land or keeping carbon trapped in peat bogs.

In principle, the measures are necessary. Although better than most, EU farming does damage. Its greenhouse-gas emissions comprise more than 10% of the bloc’s total. Pesticides and fertilizers poison bodies of water and, together with intensive cultivation, degrade the land’s productive potential. By paying farmers to mitigate such ills, governments can deliver a valuable public good.

In practice, the policy shift has come as a shock to farmers, culturally and operationally. Once proud providers, many now feel branded as enemies of the earth. Accustomed to dealing with sympathetic agriculture officials, they must also grapple with environmental authorities. The eco-schemes entail added costs that direct subsidies didn’t. Worse, once translated into a babel of national and local rules, the red tape can be all but impossible to navigate.

Lucht says he can’t take much advantage of the eco-schemes that Germany has designed. One would reward him for the great diversity of crops he grows, but its percentage limits would also require cutting back on the clover that naturally fertilizes his fields — precisely the opposite of good organic practice. “That makes absolutely no technical sense,” he says.

The upshot is unrest at a vulnerable time for Europe. Tractor convoys and manure-spraying protests garner sympathy among people exasperated with ineffective leadership, and create opportunity for extremists — as evidenced by the electoral successes of the far-right Alternative for Germany and the Farmer-Citizen Movement in the Netherlands.

European leaders’ response so far has been to sacrifice the environment, easing requirements in ways that have often added to confusion. As future articles in this series will show, such capitulation ultimately won’t benefit anyone. Instead, officials must learn from their mistakes and accelerate the green transition.

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This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Mark Whitehouse is a member of the editorial board covering global economics and finance. Previously, he reported on economics for the Wall Street Journal and was managing editor of Vedomosti, a Russian-language business daily.

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