Latvia Begins EU Funding Negotiations Amidst European Farmer Protests
The Minister of Agriculture, Armands Krauze, announced the commencement of negotiations between Latvia and the European Commission regarding the EU’s 2028-2034 annual planning period at the “Towards a healthy agriculture” conference in Jelgava on December 17th, hosted by the Ministry of Agriculture and the Latvian Rural Consultation and Education Center.
This announcement came just a day before meaningful farmer protests in Brussels, featuring thousands of participants and agricultural machinery – a now-common occurrence in the EU capital, recently escalated with the addition of burning tires. Reports from the December 18th protests resembled scenes more typical of cities in Africa or the Caribbean.
Europeans are tempted by cheap steaks from Argentina
The protests suggest a crossing of previously held boundaries, moving beyond traditional methods like dumping manure in public spaces. it’s believed farmers are being utilized in a power struggle between the EU bureaucracy and the governments of older EU member states,who are offering more support to the protesters than usual. The core of the conflict lies in the EU’s desire to reduce inflation by easing food import regulations, a move perceived by several member state leaders as a threat to thier farmers. The potential destruction of these farms would frist impact national governments, then the European Commission, and finally the European Central Bank’s price stability guarantees. Specifically, the dispute centers on the proposed free trade agreement between the EU and Mercosur – the South American free trade association of Brazil, Argentina, Paraguay, and Uruguay.
News emerged on Friday that the protests successfully disrupted the planned signing of the agreement in Brazil,officially postponing it until next year,providing further time to debate the resources available to support European farmers.
EU funding will be replaced by consumer money
EU member states,and the EU itself,have effectively demanded that farmer concerns be voiced through protests in Brussels,hoping to draw attention to their plight. The EU has largely removed agricultural products from the market,relying on support payments.Data presented at the Jelgava event revealed that for approximately 45,000 small and medium-sized Latvian farms, 80-95% of their income derives from EU support. Even for the 5,200 large-scale producers in Latvia, income from sales represents only 35-40% of their total revenue. Essentially, the EU views its citizens as the raw material source for European-grown food, with consumers ultimately paying for the processing – including sorting, storage, transport, and service – of agricultural products.
EU Funding for Latvia: A Modest Request amidst Shifting Priorities
Latvia’s request for a billion euros from the European Commission (EC) over seven years, while seemingly reasonable, is likely to face significant scrutiny. The EC is expected to negotiate extensively to avoid setting a precedent that could trigger similar demands from other member states. This comes as the real value of EU funding faces erosion due to inflation and shifting budgetary priorities within the EU.
A Shrinking Pie?
The requested amount, when considered alongside the decreasing purchasing power of the euro, represents a more substantial reduction in support than the initially stated 24%. Accounting for inflation as the current EU multi-year budget was established around 2020, the reduction in real terms is closer to 124%. This means that the same amount of money buys considerably less now, and will likely buy even less during the next planning period (2028-2034).
The EC is also strategically slowing growth in existing expenditure areas to free up funds for new priorities, such as technological advancement, military protection, and other areas where the EU aims to become a global leader. This reallocation of funds could impact Latvia’s current allocations, possibly affecting support for agricultural initiatives focused on environmental diversity and innovative agricultural processing.
The distribution of funds for the 2028-2034 planning period remains largely uncertain, with concrete details still emerging. As such, expectations for substantial increases in funding should be tempered.
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