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Saturday, July 20, 2024

State offers billions to farmers

Norwegian taxpayers are likely to have to subsidize their farmers by record-high amounts, although not quite as much as the farmers want. The farmer-friendly government offered them a stunning NOK 10.15 billion on Thursday, more than 10 times what they got last year.

The Norwegian government is trying to ward off more farmers’ protests, like this one in front of Parliament last year. The sign on the tractor parked in front of the Norwegian Parliament reads “Norway needs its farmers.” PHOTO: Møst

Viil Søyland, who leads the state’s negotiations with the farmers’ lobbying organizations over the past week, described the government’s offer presented on Thursday as “solid.” She said it reflects what the government, which includes the especially farmer-friendly Center Party, thinks is necessary “in order to help ensure Norwegian food production and self-sufficiency in a situation with unpredictable markets and strong cost growth.”

The leader of the farmers’ largest lobby group, Norsk Bondelag, reacted favourably for a change, calling the offer at least “a good starting point” for ongoing negotiations over the next two weeks. The group Bjørn Gimming represents is notoriously hard to please, though, constantly believing that they need much more state support than other working groups. 

“We will read through the offer very carefully and see what it will mean for individual farmers,” stated Gimming after receiving the record-high offer of state support. 

Others, however, were not so positive. Norwegian Broadcasting (NRK) reported that some farmers think the state has inflated its offer and that it’s really “only” worth around NOK 8.9 billion (equal to nearly USD 1 billion at current exchange rates). Søyland denies that, claiming that the offer of NOK 10.15 is calculated “in a traditional manner” given the current framework for agricultural support. That includes a mix of direct support, market regulation of meat and dairy products and tariff protection that keeps cheaper foreign food imports out of Norway, especially during the summer growing season. That’s when products like imported tomatoes and other produce are subjected to high tariffs that make them as expensive as the high prices Norwegian-grown produce commands. That means tomatoes from Italy, for example, generally disappear from the market until Norway’s tomato season is over.

The leader of the smaller farmers’ organization, Norsk Bonde- og Småbrukarlag, said she also needs to examine the state’s offer more closely. Kjersti Hoff, however, acknowledged that “these are big numbers and nothing like we’ve seen before. We’ll take that into our considerations. There are many factors here.”

Those “factors” include how farmers have long complained that the pay gap between themselves and other working groups has widened in recent year. Most needs jobs on the side in addition to farming income. This year they also face record high prices, like everyone else, for electricity and fuel, not least the diesel needed to run their tractors. Prices for fertilizer and animal feed have also reached record levels.

The run-up to this year’s subsidy negotiations has been full of conflict and tough talk, with the farmers also all but threatening the Center Party to meet campaign promises of increased support. Center has plunged in public opinion polls since last fall’s election made it possible for Center to form a minority coalition government with the Labour Party. At the time, Center won just over 13 percent of the vote. The latest polls show them at less than 7 percent.

Center is thus under enormous pressure to hang on to its farming constituents. Local elected officials from the Center Party have also threatened to abandon the party if its leader, Trygve Slagsvold Vedum, doesn’t meet their demands. Vedum also serves as finance minister now, meaning he’s in charge of the government’s purse strings.

It’s ultimately, however, up to whether Parliament will go along with the government’s proposal for so much agricultural support. Food prices are already rising because of higher costs and shortages caused by the loss of agricultural products from war-torn Ukraine. Many opposition politicians in Parliament don’t want food prices in Norway to rise even higher than they already are. Berglund



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