May 19, 2022

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Terrible price - or terrible noise

Terrible price – or terrible noise

Farmers submitted their demands on Wednesday in this year’s agricultural settlement. The starting point before negotiations is historically demanding. The government faces two choices: it must endure a terribly costly solution, or a peasant uprising that could shake up Labor and the central government’s entire government program.

Like any other business community, Norwegian farmers have had to endure sharp increases in electricity and fuel prices. The price of rolled bale plastic, construction materials and fertilizers has also exploded over the past six months.

Some of these costs are offset by agriculture, but far from all. The Agriculture Budget Committee estimates that farmers are aiming to reduce their income by 9.5 percent this year, or NOK 40,000 per human year.

Precious promises

Ahead of this year’s agricultural settlement, which will ensure farmers ’income opportunities in 2023, farmers will start with a solid minus. And they will negotiate with the two ruling parties who have promised to do the opposite.

In the hartal platform, it is stated in black and white that the Labor-SP government will do:

“Present a binding and timely plan to close the income gap between agriculture and other groups in the community.”

According to estimates by the Norwegian Farmers and Small Owners Association, this income gap will be NOK 246,100 by 2022. Reducing this to a quarter, as demanded by the Norwegian Farmers Association, would bring the NOK to more than 100,000 per human year. NOK more than 3 billion. In addition, farmers will be compensated for additional costs. It is therefore a necessity to create a historic record in Norway.

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After 2016, with needs hovering between one and a half, only one and a half billion kroner of increased money transfers in the state budget. The outcome of the negotiations has risen from NOK 300 million to NOK 1.3 billion. This year, demand could double or triple, perhaps even more.

Frustrated farmers

Last year, farmers abandoned the talks. Then the original offer of the state will remain the same. As soon as the government changed, the farmers demanded additional negotiations and their demands were granted an additional NOK 754 million. But after that, the cost increase only continued.

TV 2 previously provided calculations to Tore Aasgaard Næss, a farmer in Vertal. His cows need 2,500 round bundles a year, and the cost for these is NOK 700,000 more this year than last. The price of fertilizer has tripled.

– There is now an end to food production on a voluntary basis. It no longer works, Næss tells TV2.

He expects a solid boost of money and settlement at the table. He refuses to pay membership fees to the Norwegian Farmers Association until he sees definitive results.

This year’s solution is the first opportunity in three years for farmers. By 2020, normal agricultural negotiations have not taken place due to the epidemic. Meat and dairy producers benefited from the closed borders and reduced trade leaks to Sweden, but this effect is no longer there.

The war in Ukraine strengthened farmers’ arguments about food production in Norwegian resources, but at the same time contributed to further cost increases.

Hurdle allies Labor and the Center Party have contributed to creating sky-high expectations for income growth for agriculture. Farmers now expect the government to provide at least one turn in agricultural policy.

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Budget summary for Jonas and Trickway

The government, for its part, has already announced cuts in its priorities to offset the cost of welcoming and protecting refugees from Ukraine. Social reforms and major transportation projects may fail, and the more expensive agricultural solution will require more painful savings in other areas.

If the farmers are successful by May 17, it will be overseen by teachers, nurses and other groups in the public sector.

A broader agrarian migration could spread further and increase the pressure on wages in other parts of society and increase the risk of higher interest rates, warns professional economists and the central bank governor.

But disappointing farmers, especially the central party, has a high price to pay. Eight years after the Conservative government, Agriculture Minister Sandra Boch and party leader Trigway Slaksvold have announced a turning point in agricultural policy.

If the turnaround operation fails, Oslo’s center will be filled with tractors and angry farmers.

There is a lot of risk to the farmers’ traders and the government. If farmers ask, it will be expensive.

Otherwise the problem will occur.