Monday, March 30, 2009

An EU agriculture fudge

The TaxPayers' Alliance has a new report out today revealing that the cost to consumers and taxpayers of the EU's disastrous Common Agricultural Policy is £400 a year in higher food prices and increased taxes.

To go with the report, we've produced this viral video - enjoy!


Letters From A Tory said...

Nice idea, but it's going to take months if not years of pounding people with information to make them realise that they pay for the EU as much as they pay for Brown's seemingly endless bailouts.

Farmer J said...

As a farmer in receipt of said subsidies it perhaps ill behoves me to comment, but has it ever occurred to you that the subsidy, while directed at the farmer, is in fact a subsidy of the consumer?

Without the subsidy most farmers would not make a profit, or make so little profit as to make the whole enterprise unviable. If large numbers of farmers simply quit, and no-one took over their land, the supply of food would fall dramatically, and prices would rise to compensate. So the consumer would end up out of pocket.

But you will say, that wouldn't happen because we could import cheaper food from abroad to replace that lost from home production. True, but at what cost? We are currently discovering that a fall in the pound has a big impact on prices in the shops. Consumers would be faced with a rollercoaster ride, based on international commodity prices, and currency movements. At times prices would rise rapidly, perhaps double in months. They would undoubtedly fall at other times. But as we see with petrol, prices tend to rise quicker than they fall. There would be a ratchet effect - food prices rise quickly in times of shortage/currency falls, drop back slowly, but never quite to where they started.

Thus the current system provides a buffer mechanism, to smooth out the rapid price swings that are inherent in unsubsidised agricultural production. It also ensures that food supplies are secure, a not insignificant benefit in these troubled times.

Gnostic said...

How on earth did farmers survive, pre-EU? Because they didn't have the system hanging like a millstone around their collective necks.

I live in a farming community and I've seen good people legislated and red taped out of business. Nearly every other farm is up for sale because farming is becoming increasingly untenable and people need to feed their families.

As for food production, come April/May many of the fields in this part of the world turn rapeseed yellow. What has that got to do with ensuring secure food supplies? Farmers are being bribed/coerced into producing biofuel crops to pander to the suicidal policies of the environmental lobby. This is to the detriment of poorer nations who would buy surplus food/grain. Not how I would describe food security.

PS Devil, the vid is frigging brilliant. Thanks.

TomC said...

The producers of this video evidently couldn't resist appealing to populist viewpoints, the inevitable result of which is a discrediting display of lies and propaganda.

Europe's vegetable production is not, and never has been subsidised. It is a shining example of a quality industry driven by market demand. If I was a vegetable producer I would be absolutely fucking mad with anger at this.

EU subsidies no longer apply to specific food production areas. Commodities that used to be subsidised included cereals, oilseeds, protein crops, milk, beef and sheep. Pig and poultry production was never subsidised.

For several years now these subsidies no longer apply. This doesn't mean that producers no longer receive the money. The criteria have changed and now beneficiaries must jump through a complex web of Green and "sustainable" hoops that have absolutely nothing to do with food production.

By all means let's do away with this corrupt mechanism but why resort to the same fuckwitted system of lies and propaganda so beloved of our collectivist enemies?

Every time this argument comes up there seems to be a competition to see how half-baked and uninformed the views can be. Why do people pretend to be so indignant when they can't even be arsed to find out the simplest of facts about this subject?

And while we're at it let's not forget that subsidies for UK farmers pre-dated EU membership, with the British government's Compensatory Payments scheme. It's not just EU subsidies we should be complaining about, but all subsidies and economic regulations worldwide if we really value human progress.

Timothy Wallace said...

Tom C - I believe the video says vegetables are more expensive than they ought to be. That's because of restrictions on imports from non-EU countries, which certainly are there - so no quite 'a quality industry driven by market demand'.

TomC said...

"...This is to the detriment of poorer nations who would buy surplus food/grain."

No, sorry. Subsidising a commodity artificially increases supply, which then reduces price, as demand must be found for it. Producers then become addicted to the subsidies for survival. This means food is actually a little cheaper, although not enough to justify tax-payer theft for the subsidies in the first place. Problems arise in 3rd world countries who rely on agricultural production for GDP as the anti-globalists and their own governments prevent them from developing a modern economy and becoming wealthier like us.

"...vegetables are more expensive than they ought to be. That's because of restrictions on imports from non-EU countries, which certainly are there...

All such restrictions are equally immoral, but the claim here is about farm subsidies. Fresh vegetables have low value / volume ratio and a limited shelf life. They therefore have limited travel potential. Farm subsidies concentrate on relatively valuable commodities that have a long storage life and can be easily transported worldwide.

Trixy said...

TomC: how's working at the European Commission today?

I wonder how many people would agree that the CAP is a disaster, both financially, ecologically and morally and yet will go out on June 4th and vote Tory, Labour, Lib Dem or Green, thus voting for what they said they were against?

TomC said...

@ Trixy. Actually, I'm a farmer.

I agree with your comment. Sadly, it's worse than you say. There is no viable alternative to Statism, in view of the fact that many Libertarians are anything but, hiding behind simplistic and erroneous concepts of personal freedom; whilst hypocritically committing themselves economically to the very opposite viewpoint: collectivism.

Also, today's Statism proposes a set of “moral imperatives” – Environmentalism – that has never been debated in any democratic forum yet has been entirely absorbed into the so-called “consensus” politics of all the major political parties despite having no popular grass roots support. So much for “left / right democracy”.

I'm not sure about the CAP being an “ecological” disaster though. Why would this be the case?

_Felix said...

Go on then, Tom ... how are many libertarians collectivists? Cryptic statement. Do you just mean because they might give a pragmatic (or cynical) vote to a major party?

TomC said...

No. It's because they're Anarcho-Communists, Felix.

And also because they wilfully confuse the idea of political freedom with "copping out". That means they have to agree with the idea of institutionalised theft of values from the productive population; or die of starvation.

And if that upsets Anarcho-Communists here, firstly why are you here? And secondly, fuck off, I'm not spending the next 2 days arguing about it.

Anonymous said...

Well Tom C you obviously lost the arguement without much of a fight there.

Never even got around to telling you what happened in New Zealand when their government ended all farming subsidies and left it to the free market.

You Gimp

TomC said...

Sigh - Anon - read my previous comments. You will see that I am against subsidies. Utter cunt.

_Felix said...

Huh - NZ is the only country without any kind of agricultural subsidy, for twenty years or more now (and it's their largest sector). I did not know that. I also missed that they had an election a few months back and elected a tax-reducing, welfare-cutting party. This is all pretty cool. Are you going to claim that they're doing badly for themselves as a result, Anonymous?

_Felix said...

Farmer J:
Yes, wild price fluctuations are undesirable, and stability is a good thing, and you may be right about prices tending to be sticky, in that raising prices when the market seems ready for it is easily done, but lowering prices means investing in more production capacity, which means a bit of risk and effort. Fine.

Thing is though, taken to its logical conclusion, what this all amounts to is an argument against trading at all, because the people you are trading with might sometimes vary their prices. I don't know if a global market would be more volatile than the internal market of a country with no imports or exports; what you're suggesting is that the combination of imports and subsidies has a stabilising effect, but I can't see why that would be logically true. It looks to me like a half measure, a compromise between doing a thing (trading overseas) and not risking it, by doing it half-assed.

You mention currency markets as a cause of wild price variations; maybe so, and maybe subsidies do stabilise matters, but do these wild price variations matter to a wealthier country? I mean, if a loaf of bread sometimes cost 50p and sometimes cost 25p, would we actually mind? If fixed prices are always a good thing, we should perhaps introduce tariffs and subsidies managed by each individual local authority, to reduce the amount of trade between UK counties, and ensure that a loaf of bread always reliably costs £2.50 (taking subsidies into consideration as part of the price).

Possibly sticky prices depend on monopolies (which require government baking to be stable). I'm not sure on this point; but I wouldn't have thought petrol prices were a great example, what with OPEC and that. I don't know.

_Felix said...

Heh, that's government backing, not government baking. Just to be clear.

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