23 March 2005 Blog Home : March 2005 : Permalink
What is the European model of agriculture?
The reform of the CAP has been guided by the fundamental principles underlying the "European model of agriculture":
The European model implies an agricultural policy that is more transparent to the public, and which works to create the sort of farming sector that society wants and expects, both today and in years to come.
Leaving aside the usual questions of how exactly Brussels describes things as simplified or transparent (I think I've seen more transparent rocks) and the like there is bullet points one and two which would seem to be have all sorts of contradictions. For example efficient farming typically means large scale farms (think East Anglia) not diddy little farms with 2 cows, half a dozen sheep and 2 fields of maize (think Germany). In other words efficiency would seem to require a loss of farming income by small farmers. Likewise an efficient farming sector that "occupies a leading position on the world market" would seem to be one that would not require any subsidies at all. And so on. Read this post at "An Englishman's Castle" for the contradictions between environmentally friendly, no GM crops and efficiency.The list shows that the major recipients of the £3.9 billion that the British taxpayer pays into the CAP are big companies with little or no link with the land.
Principally, they are sugar and dairy processors, the top dozen of which received more than £10 million each, nearly five times more than any farming business.
One such firm, Meadow Foods, received £25 million, and Nestlé £11.6 million, but the others in the top 10 are dwarfed by Tate & Lyle, which received £20 million more in 2003-04 than in the previous year.
The reason so many food companies receive so much money is that subsidies and import controls make sugar three times the price it is on the world market and dairy products twice as expensive.
Last week Timothy Garton Ash asked what the Eurosceptic vision for Europe would be - implying that we didin't really have one. Well I responded saying that amongst other things I thought that the CAP and CFP were nuts and that we should abolish them. When I wrote that I had no real idea of just how much we were paying for these nutty ideas. It isn't as if abolition were an untested policy, our Antipodean commonwealth brethren scrapped farm subsidies over a decade ago with limited impact on farmers. We need to do the same, a 2002 article has the key statistics about the CAP - none of which appear on the EU's FAQ.
in 1999 the EU provided $114.5 billion in producer support which was the equivalent of 49 percent of gross farm revenue.
and
EU food prices are 44 percent higher than they would be without the Common Agricultural Policy, while US food prices are 11 percent higher because of US farm subsidies.
In the EU-15 countries, about 17 percent of consumer spending is for food; in the 10 new countries, the average is 35 percent. The price of butter, for example, is about 2.5 times higher in the EU than in New Zealand, which has eliminated most farm subsidies.
So to sum up. We European suckerscitizens are paying through the nose two ways for the chance to enjoy "preserving traditions and the environment" and a significant chunk of the beneficiaries turn out to be not the "poor" farmers but the shareholders and employees of large food industry companies such as Tate and Lyle, the Swiss firm Nestlé (Switzerland is not part of the EU) and bankrupt Parmalat. Is it any wonder the CAP is absolutely top in the list of reasons why I say "Ceterum censeo Unionem Europaeam esse delendam"
PS An Englishmans's Castle also comments on the Torygraph article as does Tim Worstall
Update: The Wapping Liar has an excellent editorial on the subject which makes a couple of points that I should have made myself:It would be a mistake, however, to be unduly critical of those who have availed themselves of this treasure trove. All of the companies and characters concerned can protest that if they refused to take the direct payments, other donations and export refunds on offer, their competitors elsewhere certainly would. If the EU is ready to send ��127,324,713 in the direction of Tate & Lyle, then the chairman of that company would be either a saint or a madman not to submit the necessary paperwork to obtain it. The result is that the food bill for the typical British family of four is some ��600 higher per year than it would be otherwise. It is the system that is rotten, not those who, perfectly rationally, exploit it.
It is also a system where reform is promised yet progress is slow. Apologists would argue that although the CAP was responsible for the better part of two thirds of the EU budget some 20 years ago, that proportion has been reduced to just under half.
This is no triumph. The shift is more the consequence of increased expenditure in other policy realms than a sustained drive to cut agricultural subsidies. And there is not much hope of the current 50 per cent share being significantly eroded until 2013 at the earliest.