Hopes for less hostile subsidy negotiations between the state agriculture ministry and Norwegian farmers dimmed on Tuesday, after the state only offered a tenth of the financial support sought by the country’s powerful farm lobby. Agriculture Minister Sylvi Listhaug may have the public on her side, though, after a new survey showed that price and safety are the two most important factors when Norwegians buy food.
Listhaug’s chief negotiator, Leif Forsell, unveiled an offer that cuts farmers’ direct subsidy by NOK 110 million, instead of raising it by the NOK 490 million they wanted. The government is instead offering an increase in measures that would raise some food prices, by an average NOK 80 per year per household in Norway.
The state pointed out that good harvests, low interest rates and regulated prices led to an average rise in income of 8.7 percent for farmers this year, much higher than the 4.9 percent expected after last year’s noisy negotiations were finally settled and nearly three times the rate of income growth enjoyed by most other labour groups in Norway.
Tine, Norway’s dominant dairy cooperative, recently reported strong first-quarter operating results of NOK 327 million, up from NOK 220 million in the same period last year. Tine, which can pass on results to member farmers, was among food industry players also reporting strong sales and favourable currency exchange rates.
‘Good starting point’
The ministry thus reasons that the sharp rise in farmers’ income in 2015 means they should be satisfied with a raise of just 1.75 percent in 2016. And with that, the state cut the NOK 950 million in overall state aid sought by the farmers to just NOK 90 million.
“Moderation has characterized this year’s wage negotiations,” Forsell said. “The state’s offer must be viewed against a background of much stronger income growth within agriculture than for other groups, both in 2014 and 2015. This offer is equal a raise of 10.5 percent from 2014 to 2016, or around 5 percent per year. That’s a good starting point for a new agricultural settlement.”
Not so, responded the farmers’ representatives. They claimed they were disappointed and frustrated that the state wasn’t offering more money “to increase food production,” and claimed the government wasn’t taking farming seriously.
“This creates great frustration for farmers and sends a clearly negative signal to the industry,” claimed Lars Petter Bartnes, leader of the national farming organization Norges Bondelag. He pointed to another proposal by the government to reduce the number of milk production regions, which he claimed would further centralize production. The farmers want to decentralize, despite the higher costs that result.
Both Bartnes and Merete Furuberg of the smaller farmers’ organization Norsk Bonde- og Småbrukarlag said the gap between their demands and the state’s offer was wide, although Forsell claimed it was narrower than it had been in years. Furuberg complained farmers need higher incomes to encourage the next generation to take over. She characterized the state’s offer as “worse than expected,” and now both she and Bartnes will determine whether there’s any basis for negotiations.
More price conscious
A new survey conducted by the think tanks Agri and Agenda, meanwhile, found that Norwegians are most concerned with food safety and price when buying food, followed by animal welfare, farmers’ income and working conditions and climate. That can help the state as they face off against farmers accustomed to receiving heavy subsidy and protection from foreign competition. Among Listhaug’s goals is to lower Norway’s notoriously high food prices and make farming more efficient.
Listhaug, who comes from a farming family herself, has also stressed that the higher income for farmers this year had boosted investment and therefore optimism in the industry. Far fewer farmers were leaving the business, dairy production has jumped and little agricultural land was being converted to other uses. While the farmers often stress how difficult it is to farm in Norway, Listhaug had numbers to suggest the opposite. Negotiations will likely be noisy nonetheless, she admitted at last weekend’s meeting of her Progress Party: “There’s always a some turbulence when we have negotiations.”