Ye Ol Farming Clubbe
In 2005 EU spent 100.1 billion euros (ie 100 100 000 000 euros!).
In the EU there are ca 462 000 000 inhabitants.
Or the EU spends (your tax money!) 2150€ per person and year!
Ca half of that or 1000€/capita goes to farming aids via the infamous CAP - Common Agricultural Policy.
So what is better: 1000€ out of the pocket per person before one fills up the first food basket or that extra 1000€ from January first?
For a normal family that is 4000€ extra to spend on food. Now, the food prices will go up, but then at least we consumer directly can see and decide where to put the money on food. And probably more importantly we will avoid export subsidies that will destroy the markets in developing countries. Also, we will avoid the export subsidy on tobacco (sic!).
Perhaps, a small portion of CAP could remain, but then only to help and develop better sustainable farming methods!
posted by Johan @ 11:19
4 comments
4 Comments:
Johan:
"For a normal family that is 4000€ extra to spend on food. Now, the food prices will go up, but then at least we consumer directly can see and decide where to put the money on food. "
Economists have been debating over all issues raised by those couple os sentences for centuries. Don't even go there.
The foundation for CAP has its roots in post-WWII Europe dependant on the Marshall Plan and subject to famine. Now it aims mainly to protect a working class that typically has very low income (farmers).
In my opinion, the only way to change policy thinking on agriculture is to debate:
- wouldn't farmers be also better off with free trade? Can they see it? Feel it?
Well, all I said is bogus. Just wanted to shed some light on a different aspect of the problem. That's all.
I thought the statements that the CAP is designed to protect small farmers became obsolete when it turned out that 70% of the CAP budget (in France! - probably the most fierce defender of the CAP because of the now obsolete poor farmer reasoning) goes to the 30% largest farmers... (i am not sure about the exact percentages but in that neighbourhood).
If one do not want a certain group of people to abandon a certain line of work it is often better to give them a decent pay. This is the same reasoning behind why aid to people in the slums around world is counter-productive. If they could get a decent wage for the jobs they had outside the megacities they would probably stay there, or?
(Just so happens that is also the reason why quite a few farmers in Latin America grow coca plants rather than coffee or carrots or whatever).
One reason (again one reason) of the megacity urbanisation is the export subsidies and import tolls of the EU and US. Because they cannot compete with the low prized EU products.
Are there any economists that still think that market protection in terms of artificially raising producer incomes or "protecting" them from external competition will yield long term viable companies or products? And be cost-effective for the consumers!
Within the EU my guess is that large farmers to some or large extent have adopted to the financing instruments of the CAP rather than aiming at producing farming products ...
I dunno how to make a decent state or EU instrument to support small farmers. One could have a cut-off in size or production of the farm. But better still is promote local trade of farming goods and produce, like the "farmers own market" and similar approaches. The EU regulations for added-value products should be more designed to allow for small scale production (ie would lead to a diveristy in local sausage and cheese makers etc).
The "need" for CAP nowadays is probably more in the assumed potential lack of willingness to buy local farming products and the assumed expected inpour of foreign farming produce.
The word "free trade" is a bit double-edged: free for whom?
Johan, I totally agree with you on this issue. And I believe the reasoning for CAP changes accordingly to times, whatever the lobby for it comes up with at the moment.
I don't really understand the full reasoning behind this:
" One reason (again one reason) of the megacity urbanisation is the export subsidies and import tolls of the EU and US."
I'll try to read a few articles about it some other time. I really cannot afford too much time reading outside work nowadays.
I just have a question that is on my mind for so long: How come you speak so much and so strongly on your blog and be so quiet socially face to face??? eheheheh... always wondered...
i guess you are not on the same email lists as me :-)
if farmers and others on the country cannot make a living they are more likely to more somewhere else, usualluy a big city ...
we can talk next time we meet :-)
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