On his first day back in office, President Donald J. Trump wasted little time issuing a series of executive orders overturning regulations restraining U.S. innovation and competitiveness.
European CEOs took notice.
At the World Economic Forum in Davos, Switzerland in late January, Morten Wierod, CEO of the Swiss robotics company ABB, echoed the sentiments of his fellow chief executives: “It needs to be a clear reset on regulation and let business get on with it.”
Wierod went on to state that while each European Union (EU) regulation is set with good intentions, “it’s when you take and you put everything together, it just becomes too much. It gets too complex.”
One set of regulations that has the entire continent reeling is 2019’s European Green Deal, which launched with the goal of making the EU climate-neutral by 2050 through various environmental and agricultural policies.
Among the rules that have posed challenges for local farmers include targets to reduce pesticide use by 50 percent by 2030, policies aimed at reducing nitrogen emissions and mandates that require farmers to allocate a portion of their land to non-productive use to enhance biodiversity. All while mandating a doubling of organic production to 25 percent of EU farmland regardless of market demands.
Farmers in the Netherlands were the first to revolt. You may recall scenes from 2019 when Dutch farmers drove their tractors into the cities, blocking highways and major roads. Other farmers stormed government offices. Some dumped milk on the streets while others blockaded roads and government buildings with manure and hay bales set on fire.
The Dutch insurrection spread across Europe in 2023 as the EU climate and environmental regulations predictably led to rising fuel and production costs coupled with increased competition from cheaper non-EU imports.
Along with the Netherlands, famers in Germany, Belgium, Poland, Spain, Italy and Greece staged coordinated demonstrations in which tractor convoys shut down major transport routes across Europe and manure and produce was dumped in front of government buildings.
“They’re drowning us with all these regulations,” railed one farmer in Spain. “They need to ease up on all the directives and bureaucracy. We can’t compete with other countries when things are like this.”
In response to the widespread rebellion, the European Commission backed off several key pieces of the Green Deal, including its plans to cut pesticide use and set aside land for biodiversity.
Although Europe’s long-term climate plans remain relatively intact, several European countries have experienced a political shift away from the left since the Green Deal was first enacted.
Conservative gains in Italy, Sweeden, Finland, France and Germany between 2022 and 2024 signal widespread desire for a move away from command-and-control government policies.
While not entirely attributable to the Green Deal, the EU’s regulatory-first approach has led to significant dissatisfaction among the continent’s farmers, business leaders and voters. But could the recent events in Europe be a harbinger of things to come in California?
In addition to their broader assault on environmental no-no’s like single-use plastics, oil and gas production and gas-powered vehicles, California’s ruling political class has added even greater weight to the regulatory burden already carried by the state’s farmers.
A widely circulated January 2025 study out of Cal Poly San Luis Obispo documented the cumulative costs of regulatory compliance for California farmers. Compared to its own baseline study in 2006, the report places total regulatory costs at $1,600 per acre in 2024, an increase of nearly 1,400 percent. Over the past 18 years, two dozen major regulations were added in the areas of food safety, air quality, water quality, health and safety and wages, each individual mandate carrying with it another incremental cost.
In addition to rising regulatory costs, production expenses are increasing faster in California than the rest of the country, according to USDA’s Economic Research Service. And gross receipts are rising faster in the rest of the country than in California. Plot both of those lines on a graph and you find that net profits have risen by 59 percent for U.S. farmers over the past 10 years but have fallen by 37 percent for California farmers during the same period.
Consequently, California lost nearly 15,000 farms between 2012 and 2022, a loss of 19 percent, along with 1.4 million acres of farmland. Those are sobering numbers for America’s greatest agricultural state.
Hopefully California’s political pendulum has reached its amplitude and the same course correction we are beginning to see in Europe will soon take hold in the Golden State. But things might need a little nudge.
I can’t remember California farmers ever dumping loads of wasted produce on the State Capitol’s well-kept grounds. But maybe our friends in Europe are on to something.