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EU's green reputation takes a hit

by SuperiorInvest

A farmer collects waste to block the RN 19 near Vesoul, eastern France, on January 25, 2024.

Sebastian Bozón | afp | fake images

The European Union is proud to be a defender of the environment.

But that reputation is now being firmly put to the test, after it toned down its climate policies following angry farmers protests taking place across the continent.

The European Commission, the EU's executive arm, now intends to scrap a plan to halve pesticide use. In addition, the institution also decided last week to omit the agricultural sector from a strict schedule to reduce greenhouse gas emissions by 90% before 2040.

Speaking to CNBC on Thursday, EU Agriculture Commissioner Janusz Wojciechowski said he was “happy” with the U-turns because they were not “completely fair.”

“We need to reduce pesticide use, but not force farmers [to do it]” he said, adding that the solution is to provide more financial subsidies to the sector to incentivize them to adopt greener practices.

The EU wants to become carbon neutral by 2050. It also wants to reduce greenhouse gas emissions by at least 55% by 2030, compared to 1990 levels.

Asked whether these latest policy changes could compromise those ambitious goals, Wojciechowski said: “This is the general goal for the entire economy, but in agriculture, we should take into account the specific characteristics of agriculture.”

Europe's reassessment of its climate policies comes as the bloc approaches EU parliamentary elections in June, which are expected to bring more far-right and fringe lawmakers to Parliament.

“The farmers' issue will dominate the electoral competition for the European Parliament in 2024 [elections]by becoming one of the few pan-European issues that multiple parties will compete over,” Alberto Alemanno, a professor at HEC Paris Business School, told CNBC by email.

“The next EU political cycle (2024-29) will undoubtedly be less green to the point of calling into question the implementation of the green new deal [Europe’s flagship program towards carbon neutrality] and slow down its next chapters, such as the extension of sustainability requirements to agriculture,” Alemanno also said, adding that the recent protests “are only the prelude to new confrontations to come.”

A farmer collects waste to block the RN 19 near Vesoul, eastern France, on January 25, 2024.

Sebastian Bozón | afp | fake images

There has been a culmination of factors that have pushed farmers to protest in recent weeks, causing some damage in capitals such as Paris. These include rising costs, higher debt, competition from cheaper markets and falling selling prices.

For example, the average price of agricultural products received by farmers decreased by 9% in the third quarter of 2023, compared to a year ago.

Luc Vernet, secretary general of the Farm Europe think tank, told CNBC that farmers needed more investment support.

“Farmers no longer have access to cheap money and bankers are much more reluctant to [lend] money to the agricultural sector. Therefore, we really need to reflect within the European Union on how to achieve the transition, because clearly there is a need to move forward,” he stated.

Farmers are at the center of one of the EU's most important and historic laws: the Common Agricultural Policy, which provides 55 billion euros ($59.3 billion) each year in subsidies to the sector.

The farmers' protest even spread across the English Channel to the UK late last week. British farmers, whose country is no longer a member of the EU, staged an impromptu tractor demonstration in the port city of Dover on Friday as they protested against foreign food imports.

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