Government caves in to demands for even higher meat and cheese prices

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The farmer-friendly Center Party has won its budget battle with government coalition partners for more protectionism for agriculture in Norway. Despite loud public debate over the country’s already-high food prices, meat and cheese are likely to get even costlier after Labour and the Socialist Left agreed to raise import tariffs.

The reaction was swift after newspaper Dagens Næringsliv (DN) reported the controversial budget compromise Tuesday morning. “This is pure protectionism,” Peter Gordon, a customer at a grocery store at Majorstuen, told Norwegian Broadcasting (NRK) “If Norwegian farmers want to promote Norwegian agriculture and Norwegian products, the products should be of the quality Norwegian consumers want.” Instead, many fear, the farmers and agricultural officials are merely trying to prevent competition from products that often are much better and much cheaper.

“This is an anti-consumer measure that we’ll remember at the ballot box next year,” said another customer, while yet another, Siv Burdal, said it was “sad news. We should be able to choose the products we think are best.”

Protecting Norwegian beef, lamb and cheese
The measure will boost import tariffs on foreign beef, lamb and hard cheeses to a level that will make them at least as expensive if not moreso than the prices the Norwegian producers set on their own products. Those prices are expected to rise as well, as the farmers demand higher income.

They had sought a huge increase in their direct subsidies last spring. When the Labour-led government failed to deliver, they launched a series of protest actions and made it clear they were disappointed in their own Center Party as well. It has since fallen dramatically in public opinion polls and probably wouldn’t even win representation in Parliament if an election were to be held today.

Yet it has managed to force Labour to go along with a measure clearly aimed at winning back support from its agricultural constituency. Some view it as a desperate attempt to keep the government coalition together as it seeks reelection to a third term in the fall of 2013.

Provoking consumers
It may all backfire, though, by angering consumers while placating the farmers. The non-socialist parties like the Progress Party and the Conservatives have claimed they will roll back import tariffs, ease protectionism and lower food prices if they’re elected, and they’re running way ahead of the current left-center coalition in the polls.

Siv Jensen, leader of the Progress Party, said the higher looming prices on meat and cheese will simply send even more Norwegians over the border to shop in Sweden, where prices already can be as much as 40 percent lower than in Norway. Others note that price isn’t everything: Selection will suffer as more foreign products are kept out of Norway, even though Labour did fight for and win an exemption for brie, Camembert and Parmesan cheese. A poorer selection will also anger consumers.

Foreign Minister Jonas Gahr Støre of Labour, normally a champion of free and fair trade, was left to defend the government compromise. “Protection against imports is critical for Norwegian agriculture,” he told DN. A new system of calculating customs duties, he said, will restore a desired effect that the Center Party claims has been watered down in recent years as food prices have fallen outside Norway. The farmers basically want to force Norwegian consumers to buy local Norvegia cheese, for example, at higher prices than Dutch Gouda.

It remains to be seen how European producers will react to Norway’s higher import tariffs. They’ve already complained about other increases and threatened to impose higher tariffs themselves on Norwegian salmon and oil. One thing is clear: Unless some individual government party members break away and vote against party lines, the new protectionist measures will be approved in Parliament, where the government parties still have a majority.

Views and News from Norway/Nina Berglund

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