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Friday, April 12, 2024

Divided farmers slam state’s support

NEWS ANALYSIS: Norway’s powerful farm lobby wanted more than twice the NOK 3.3 billion they were offered in additional state support on Friday. Farmers’ representatives are thus complaining again, despite receiving record-high support and compensation for higher costs last year, and, argue some, coming out better than most all other work groups.

Farms in Norway tend to be scenic and relatively small, with little economy of scale that traditionally has cultivated large annual subsidies and other forms of state support. The farmers’ lobby chronically complains that it’s never enough, but now questions are rising about the entire farm subsidy system and how farmers’ income is calculated. PHOTO: Berglund

Now they’re dissatisfied again, and even divided. The two national farmers’ organizations, Norges Bondelag and Småbrukarlag, couldn’t even agree amongst themselves on what they should demand from the state for their highly subsidized and protected industry. For the first time since the current system of collective bargaining began in 1950, Norges Bondelag decided to go it alone and present what it thought were the most important demands.

“This is a completely new situation,” admitted Bjørn Gimming, leader of the larger of the two organizations (Bondelaget), which has more than 60,000 members, around 500 local chapters and what it admits are “good political contacts” at the national level. His job even seemed to become easier after the farmer-friendly Center Party formed a coalition government with the Labour Party in 2021 and won political control over the agriculture ministry. Agriculture Minister Sandra Borch, who comes from a farming family in Northern Norway herself, has long been a major backer of farm subsidies and all means of protecting Norwegian farmers from foreign competition.

Gimming and his former farm-lobby partners at the Småbrukarlag representing smaller farms, however, failed to agree on a common platform. He admitted to being “disappointed and sorry that we can’t stand together with joint demands.” He noted that they would have been stronger together, but claimed his organization would “take responsibility” and do its best to win the best possible settlement with the state: It spends billions of taxpayers’ money every year to support Norwegian agriculture from north to south as part of “district politics” aimed at keeping outlying areas of the country populated.

Bjørn Gimming (left), leader of Norges Bondelag, conferring with colleagues Bodhild Fjelltveit (center) and Egil Hoen after presenting their demands in April. PHOTO: Norges Bondelag

The larger farmers’ group ended up demanding NOK 6.9 billion worth of support, less than last year’s record-high outlay (which compensated farmers’ extraordinary costs) but bolder in many ways. That’s because it included demands to increase farmers’ average annual earnings by a whopping NOK 171,000 per each full-time equivalent, way above pay raises for most all other workers’ groups and 36 percent higher than last year.

Dairy farmers are among those wanting the most this year, on the grounds that a national decline in milk consumption means farmers should be allowed to further raise its price (currently around NOK 21 a liter at the grocery store) to generate more income, instead of lowering it to boost demand. Norway’s dairy industry keeps out almost all foreign competition and is dominated by farmers’ cooperative Tine, which seems to also have successfully lobbied the government into cut support to its small domestic competitors Q-meierene, Rørosmeieriet and Synnøve Finden. That’s also raised objections from those who believe Tine needs compeition.

Newspaper Aftenposten, meanwhile, was quick to brand the farmers’ income demands as “absolutely crazy,” editorializing how it came after the equivalent of a 14.4 percent pay raise last year. The farmers’ strategy, the paper noted, “seems to be to milk the most possible money out of the state and consumers in Norway while the Center Party still holds the agriculture minister’s post.”

Farmer’ leader Gimming and Viil Søyland, who’s in charge of state negotiations with the farmers over how much financial support they’ll receive, during their press conference on Friday. PHOTO: LMD

State administrative leaders of the agriculture ministry were also clearly stunned by the demand delivered last month. “We’ve never seen anything like it,” Viil Søyland, who leads negotiations on behalf of the state, said after farmers handed it over.

In her formal response to the farmers on Friday, she offered less than half, arguing that it would still provide potential income growth of 19 percent and narrow the gap between farmers’ average annual income and other groups by another NOK 40,000. The state’s package, Søyland claims, also boosts opportunities for other sources of income and financial support for measures aimed at cutting emissions and preserving nature.

Søyland said the state also wants to strengthen production of milk and vegetables, support young farmers, expand welfare programs and offer extra support to farming in Northern Norway. The NOK 3.3 billion package for farmers would be financed with funding that includes NOK 2.3 billion from the state and food price hikes for consumers of NOK 732 million.

“The state is making a very good offer, that shows how agriculture has high priority within the government,” Søyland said. She stressed that food production has been in an extraordinary situation during the past few years, both in Norway and the rest of the world. Markets for food and energy remain uncertain, and while spikes in costs have declined, they’re still expected to rise this year and next. Fertilizer costs, however, are expected to decline by 40 percent.

The farmers were not impressed. “If we want to remove the doubt within agriculture and keep farmers farming, we need a more powerful rise in income,” Gimming told Norwegian Broadcasting (NRK) after Søyland presented her offer at a press conference on Friday. He also doesn’t think the increased support is enough to retain young farmers.

The state objected, pointing to availability of investment funds and state grants tied to generation shifts, and better welfare programs. The leader of a young farmers’ group, Henrik Nordtun Gjertsen, was nonetheless complaining.

“This is so disappointing from the government,” Gjertsen told NRK. “They say in their platform and with words that they will support Norwegian agriculture but when it comes right down to it, they don’t deliver.”

NRK reported that Liv Maurstad, a dairy farmer in scenic Sjåk, started to cry when she heard the state’s offer. “We must have money to keep farming, we depend on state support,” Maurstad said. “This is far from that.” Gry Ingvild Agjeld, leader of the Vestland bondelag in western Norway, agreed: “Personally, I’m disappointed and I think many farmers are also.”

She conceded that the government’s offer shows some willingness to reduce the gap between farmers’ pay and that of other workers, but it still need to rise further. She hopes more taxpayers’ money will be put on the table during upcoming negotiations that can ran until mid-May. If no settlement is reached, the government’s proposal will be sent to Parliament for approval.

Calls are going out for a major change in farm policy in Norway, creation of which often ends in noisy standoffs with farmers dumping livestock manure outside Parliament when they don’t get what they want. Many farmers, meanwhile, have other jobs in addition to their farming. Norwegian farms dotting the landscape often appear well-kept with spacious homes often in scenic locations with top modern equipment even at farms that are small compared to those in other countries. As landowners, farmers have long been part of a powerful rural elite. Most all are sole proprietors and it’s difficult to calculate their actual income since variations can be huge, according to Professor Ola Grytten, who led a state commission formed to better determine farmers’ earnings.

He found that many farmers choose not to use all the resources or market opportunities available. Nearly half of Norway’s farmers earn less than 10 percent of their total income from agriculture, reports Aftenposten, making their farming more of a side-business that nonetheless can qualify them for state support.

The Grytten commission’s proposals for change are now under evaluation at the agriculture ministry. Aftenposten editorialized earlier this spring that this could lead to more a more realistic and precise framework for the annual farmers’ settlement. The paper noted that the farmers’ organizations aren’t enthusiastic about the proposals, not least because their members’ total income from all sources may not be so different from other Norwegians’, and thus need less subsidy and support. That prompted Aftenposten to contend that “there may not be any real income gap that needs tightening” at such high taxpayer and consumer expense. Berglund



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