Ending Farm Subsidies

edanto

It appears that a fifth of the world live on less than a dollar a day. At the same time, every cow in Europe gets about $2.50 a day in subsidies.

Surely, every principle of Justice screams that this is morally wrong. So, should farm subsidies be phased out?

There seems to be plenty of moves in Europe to go in this direction, but how will it go down here? What options will there be for farmers that are finding it hard to get by now, with the subsidies?

sceptre

You've really got two questions in there. It would help discussion rather significantly (it's why it's part of the posting guidelines) if you offered your own opinion on the first (whether subsidies should continue or not) in order that a discussion might develop out of both that and the second.

Hotblack Desiato

It's about time that Irish politicians finally got the guts to stand up to the powerful farmers' lobby. The CAP is a disgrace. The main losers - low income families who pay higher food prices. The main winners - large farmers producing food which will end up either destroyed, or dumped on third world markets. It's morally indefensible as well as economic madness.

edanto

I think they should be phased out. I'm not very familiar with the rules of international trade, but it seems like US cotton farmers get billions of dollars of handouts and then sell their crops on the international markets, undercutting farmers in developing countries where the governments can't afford such farm-dole.

A few years ago, I was in Ghana and I met a few sugar cane farmers. They told me that they couldn't compete with subsidised beet farmers in Europe and hence couldn't sell their crop. There are a lot of other factors at play, such as a dearth of sugar processing industry in Ghana - but the fact remains that poor farmers/countries are being shut out of international markets because of distorting trade practices by rich countries. And that seems unfair to me.

I think the rules have been changed in the case of sugar, but AFAIR Tony Blair said earlier this year that EU farmers get a massive proportion of the EU expenditure, something like a third. Why should we prop up an industry that leaks money, especially if it means that we're keeping poorer countries poor?

C Fodder

Before this discussion descends as all like this does into a farmer bashing exercises can people please remember why these subsidies were created ( hint : it wasn't for the farmers benefit ) and also can you think of any other industry where the price of the raw material to the producer is now less than it was 25 years ago.

IIRC in 1970 an average of 20% of an average industrial wage went on food where as now 7% goes on food.

Most farmers would happily abandon subsidies in the morning if all the other crap that goes with them was abandoned also as their income would shoot up to equivalent mid 70's levels a la New Zealand when they abandoned subsidies in the dairy sector.

DadaKopf

Hey guys, you're all right! It's true that farming subsidies and dumping of subsidised produce in developing countries is one of the causes of global poverty. The rights of way more than the 200m people living on less than $1 a day must be defended.

But it's also true that the CAP was set up to preserve Europe's agricultural productive capacity to ensure continental food security and incomes for what was then a huge proportion of the population, but is now much, much smaller. It's also true, like in the developing world, small farmers have increasingly been losing their share of income to larger farmers and processors. So European farmer's rights have to be defended, too, and issues of food security have to be considered.

The trick to phasing out subsidies - and they need to be phased out - is to find a fair and sustainable solution in which both sides win.

Imposter

edanto wrote:

I think the rules have been changed in the case of sugar, but AFAIR Tony Blair said earlier this year that EU farmers get a massive proportion of the EU expenditure, something like a third. Why should we prop up an industry that leaks money, especially if it means that we're keeping poorer countries poor?

I think Dadakopf hit the nail on the head here. If all the protectionist subsidies and laws were removed in ALL industries then it would lead to a fairer global market. What's needed is a way to do this gradually and fairly.

The only problem with this of course is that the different political systems in the world as well as the different cultures won't allow this to happen. The western world would also lose more and more jobs to developing countries which would probably mean that western countries would have higher unemployment, their social systems would have to be revised, leading to these countries becoming poorer. So in short, it's hardly likely to happen.

ninja900

ninja900 wrote:

It's about time that Irish politicians finally got the guts to stand up to the powerful farmers' lobby. The CAP is a disgrace. The main losers - low income families who pay higher food prices.

You're joking right?
Farmers are getting paid less today for what they produce than they got in 1980 and that includes subsidies.
You can guess where the production price has gone in the meantime(wages-oil-electricity etc etc) and the resulting effect on margin.

It's the only job I know where a year on year cut in income seems acceptable.

If you want to examine where the price of food is rising-you should look at the large supermarket chains.
One small example of their power...They have more profit on a litre of milk than the producer and they do nothing with it.
Even the dairy pays for stacking it in the supermarket!
The largest co-op wants to reduce the producer price by another 15 c a litre and I'll bet you wont see a reduction like that in the shop :rolleyes: the pressure for that is coming from their biggest customer - a large supermarket chain.
Unfortunately the farmer has to milk his cows and has to pay the cost of keeping them.He cant strike and they know this.
Indeed at the rate things are going, many basic foodstuffs are going to have to be imported soon, there are so many farmers giving up production here, from what I can see.

Earthman

Earthman wrote:

You're joking right?
Farmers are getting paid less today for what they produce than they got in 1980 and that includes subsidies.
You can guess where the production price has gone in the meantime(wages-oil-electricity etc etc) and the resulting effect on margin.

It's the only job I know where a year on year cut in income seems acceptable.

Absolutely spot on. I find that most people who slam farming have no idea of the income for a small farmer in a place like South Kerry or West Cork, no concept of the prices cattle or sheep get in recent years. Most farmers I know have to hold down a second job simply to make ends meet.

DadaKopf

imposter wrote:

If all the protectionist subsidies and laws were removed in ALL industries then it would lead to a fairer global market. What's needed is a way to do this gradually and fairly.

Well, I wasn't exactly saying this. I actually don't think the market is capable of being entirely fair, it must be regulated. But there are good economic arguments for rich countries eliminating subsidies and trade barriers gradually while allowing poorer countries to keep them until they have achieved a certain stage of sustainable economic and human development.

If you look at this issue from a human rights perspective, I think the fog lifts in terms of the debate and how the issue can be solved.

edanto

I agree that at it's most basic level, it's an issue of human rights and morality.

C Fodder wrote:

Most farmers would happily abandon subsidies in the morning if all the other crap that goes with them was abandoned also

Would you mind elaborating on this? I have quite a simplistic view of subsidies at the moment and I'd like to know what else is involved. Is it more than a combination of stipend, quota and a little set-aside?

I'm a city boy and it's not my intention to farmer bash - it's just a side effect of my shock at the way subsidies appear to work.

Earthman wrote:

The largest co-op wants to reduce the producer price by another 15 c a litre and I'll bet you wont see a reduction like that in the shop :rolleyes: the pressure for that is coming from their biggest customer - a large supermarket chain.

I completely agree that there is profiteering by supermarket chains and I think that's unjust as well. But I feel it is the responsibility of the farmers to somehow present a united front to the purchasers and tell them, "the price isn't going down". What other industry would allow themselves to be kept in a choke-hold by their customers?

There may be a problem of over supply of milk, perhaps that's what lets the supermarkets dictate the price. In that case, why should the rest of us prop up farmers? Again, it's a simplistic view, but if the farms can't make money, what is the motivation to stay a farmer? Why not sell up?

Of course, any change should be gradual and involve the farmers. It would cause massive hardship to do this overnight as so much money is probably invested in these farms. This maybe distasteful for the farmers here, but surely it's not as distasteful as allowing the current practices to continue with their contribution to keeping 1,200,000,000 people on a dollar a day. Or less.

sceptre

Imposter wrote:

If all the protectionist subsidies and laws were removed in ALL industries then it would lead to a fairer global market.

Balanced or open != fair. Not necessarily at any rate. It'd be true to say that if all the protectionist subsidies and laws were removed in ALL industries then it would lead to (or at least towards) an open global market. And it'd be fair to say that under those circumstances it would lead to a world market where all of the individual markets were treated fairly. Given that the duty of governments and/or supra-national organisations is (and should be) to the people who populate those markets rather than to the markets themselves, it doesn't necessarily hold that a fairer global market from the point of view of actual real people would result from the removal of all subsidies, tariffs and tools of protectionism. It might, but it might not. Certainly not good enough to build a house of cards on a foundation as sandy as that, let alone develop an argument on the assumption that it's so.

edanto

Absolutely - any alternative system to subsidies should be well thought out, particularly with regard to the law of unintended consequences. But are we agreed that subsidies need to be phased out?

I guess farm subsidies had their intended effect, in that we don't have a food supply problem and there are still plenty of farmers - but I'd imagine their consequences on developing countries were unintended.

Culchie

edanto wrote:

Absolutely - any alternative system to subsidies should be well thought out, particularly with regard to the law of unintended consequences. But are we agreed that subsidies need to be phased out?

I guess farm subsidies had their intended effect, in that we don't have a food supply problem and there are still plenty of farmers - but I'd imagine their consequences on developing countries were unintended.

I'm not going to weigh in blindly on the side of the farmers, as subsidies need to be phased out to help developing economies.....however it's the retail business and the meat factories and the profits being made these people that it the real crux of the matter.

Aidan1

It should also be pointed out that blindly dropping all subsidies could quite easily make the position of many millions of commodity producers in the developing world worse off. Its hugely simplistic to suggest that if you drop tarriff barriers, then everything will be ok. In the worst case scenario, it could lead to huge environmental problems and mass starvation. Any removal has to be carefully managed, and has to take into account issues like the American export refunds and trade linked aid. I don't envy Mandelson his task.

On another level, agriculture is always going to be 'unfair', not just because of natural advantages conferred to regions but because of the role of national policies in certain regions (macro economic transfers to farmers that aren't necessarily part of agricultural policy).

The complaints about farmers not being able to make a living in Ireland are a sad but necessary consequence of a history of disasterous agricultural policy here. Even before the foundation of the state, the focus was to create a vast class of small farmers, owning their own land and producing relatively low 'value added' outputs. While the CAP was in full swing, with subsidies linked to production and a price floor, complete with intervention buying in place, there was little impetus for structural change within agriculture. Simply put, its impossible to expect many Irish farmers to survive asuch, given the small scale nature of their businesses. There has to be change if there is to be any hope for the remaining farmers to be competitive. Putting off that change for so long has only served to make the situation worse.

edanto

Specifically, what needs to change? How could farmers get a better price and subsidies drop at the same time?

I'm not trying to be smart, I just don't know much about this area and it seems like there's a lot of experience here.

Culchie

Aidan1 wrote:

The complaints about farmers not being able to make a living in Ireland are a sad but necessary consequence of a history of disasterous agricultural policy here. Even before the foundation of the state, the focus was to create a vast class of small farmers, owning their own land and producing relatively low 'value added' outputs. While the CAP was in full swing, with subsidies linked to production and a price floor, complete with intervention buying in place, there was little impetus for structural change within agriculture. Simply put, its impossible to expect many Irish farmers to survive asuch, given the small scale nature of their businesses. There has to be change if there is to be any hope for the remaining farmers to be competitive. Putting off that change for so long has only served to make the situation worse.

It's a little one dimensional that view. If farmers were getting a fair slice of what the customers are paying, it would also help as well.

If a customer pays €5 a lb for produce, and the farmer has received €1 a lb, where has the other €4 gone?

Culchie

edanto wrote:

Specifically, what needs to change? How could farmers get a better price and subsidies drop at the same time?

I'm not trying to be smart, I just don't know much about this area and it seems like there's a lot of experience here.

If they got a fairer price and not subjected to the meat factories and retail chains profiteering, there would be no need for subsidies

Imposter

sceptre wrote:

...Given that the duty of governments and/or supra-national organisations is (and should be) to the people who populate those markets rather than to the markets themselves, it doesn't necessarily hold that a fairer global market from the point of view of actual real people would result from the removal of all subsidies, tariffs and tools of protectionism. It might, but it might not. Certainly not good enough to build a house of cards on a foundation as sandy as that, let alone develop an argument on the assumption that it's so.

I don't get you. Can you explain why eliminating them wouldn't create a fairer market?

Aidan1

If they got a fairer price and not subjected to the meat factories and retail chains profiteering, there would be no need for subsidies

Farmers are price takers, particularly when they are small and numerous in relation to buyers. The market gets to decide what a 'fair' price is, hence farmers have a limited amount of choice over what they can do with their products, particularly where the produce is perishable (milk or beef) and are forced to sell. One solution is to head up the value chain or vertically integrate, and sell to a particular end customer (ie sell directly to a butcher or to a specialist buyer). Bigger farmers do better out of this, because in some cases the situation approaches that where they have market power in their own right.

Its not simplistic, its just the way the world works. If you have proof of cartelisation or price setting, I'm sure the Competition Authority would be delighted to hear it. In the long term, the exit of a large number of small scale producers will help, as buyers are forced to deal with a smaller number of (presumably more canny) producers.

If a customer pays €5 a lb for produce, and the farmer has received €1 a lb, where has the other €4 gone?

To the guy who transported the product from farm to factory, to the processor (butcher, miller or creamery), in packaging, to the guy who sold it to the supermarket and then to the supermarket. Thats the value chain. Where the value is appropriated along that chain is a function of market power and the structure thereof. In fact, were most farmers to get 20% of the retail value of their product, they'd be delighted. In real terms the figure is usually much lower than that, and has been falling for the last 50 years.

How could farmers get a better price and subsidies drop at the same time?

In short, and in theory, because world prices are considered to be artificially depressed by the use of export subsidies and tarriffs. Consumers globally pay farmers in the west to produce goods above market value. Were these to be removed, in theory, world prices would go up. However, in practice, were this to happen, a large amount of additional supply would be stimulated, and prices would probably fall.

edanto

edanto wrote:

I completely agree that there is profiteering by supermarket chains and I think that's unjust as well. But I feel it is the responsibility of the farmers to somehow present a united front to the purchasers and tell them, "the price isn't going down". What other industry would allow themselves to be kept in a choke-hold by their customers?

The difficulty with that is, that the food stuffs can be sourced over seas.
If you look at your milk in Lidl,Aldi and Dunnes,its all produced in the UK.
The producers over there are getting roughly the same price as here.
Theres no ability to unite because a strike is not possible.
Couple that with the fact that many many farmers who have large merchant credit bills that remain unpaid and significant bank loans.
Both of which have been needed in a lot of cases to keep the ship afloat and both of which mean the farmer has no room to move.He has to keep some income coming in to service this.
Grant it , there are exceptions-those who live near towns who have been able to sell sites and those already large enough to keep borrowings to a minimum.
But these in my experience are the exception.

There may be a problem of over supply of milk, perhaps that's what lets the supermarkets dictate the price. In that case, why should the rest of us prop up farmers? Again, it's a simplistic view, but if the farms can't make money,

Theres no oversupply of milk-Indeed the supply in the winter months is very tight and only survives now due to imports.

what is the motivation to stay a farmer?

Little or none really unless you have low borrowings

Why not sell up?

Those that can do.But price is only favourable near towns and villages. Outside of those areas, you'd have cases where the sale might only be meeting the commitments.

Of course, any change should be gradual and involve the farmers. It would cause massive hardship to do this overnight as so much money is probably invested in these farms. This maybe distasteful for the farmers here, but surely it's not as distasteful as allowing the current practices to continue with their contribution to keeping 1,200,000,000 people on a dollar a day. Or less.

I dont think the ridiculous price paid by multiples for milk and beef to Irish farmers has much of an impact on African prices to be frank.
Theres exploitation much closer to home.
Within months of the "single farm payment" being agreed here, under pressure from the supermarkets, the price paid to the farmer here was dropped by an equivalent amount.
Has there been much of a drop in price in the shop? I dont think so.
The farmers price was dropped in April-yet he doesnt get paid this "single payment" untill december.
Furthermore some very costly but worthwhile environmental conditions were placed on farmers to get this single payment.These would be conditions that some would need their single payment to finance(larger slurry storage-bigger sheds etc)...In other words it wasn't free gratis.
Frankly I don't know why a lot of them continue.
I know a lot of farmers in their 50's whose sons do not want to farm-so their operations are going to end soon enough.

Anytime I've participated in these threads,I've maintained the same line
If one wants home produced produce, then it has to be paid for and thats a fair market price.
Theres no need for subsidies except for to pay for specefic things like looking after the environment and thats something that governments would have to pay for anyway.

DadaKopf

One of the problems endemic to the Irish farming lobby is that its lobby group, the IFA, is a big farmer lobby group. They don't represent the interests of the small farmer, and it's the smaller farmers who are losing out, and it's the small farmers that the CAP was supposed to protect. IMHO, small farmers need a coordinated lobby group that links up with farmers in the global South to pressure governments, the EU, the WTO, large farmers and corporations for a better deal.

Xterminator

One problem here in Ireland, is that farms were subdivied among children for generations, until they were no longer enonomically viable.

I think that ther is no harm in farmers leaving the business, and their small farms being amalgamated into larger economically viable enterprises.

A farm should produce enough revenue to sustain themselves, without the 'check in the door' mentality. Too many farm the same crop each year, regardless of the demand,and ignorant to market opportunites, like organic farming, bio fuels etc.

Yes a lot of the value is in the processing of the food, and when a farm is big enough, it can consider processing their own foods, selling direct to the consumer, or at least be in the position to demand a fair price.

Insead we are stuck in a time warp, wheere farmers are paid to leave fields idle, or to farm crops like sugar beet which there is no demand for.

X

DadaKopf

DadaKopf wrote:

One of the problems endemic to the Irish farming lobby is that its lobby group, the IFA, is a big farmer lobby group. They don't represent the interests of the small farmer, and it's the smaller farmers who are losing out, and it's the small farmers that the CAP was supposed to protect.

I'm not sure whether thats the case either.
I mean most farmers in Ireland are comparatively small-ergo most IFA members are small farmers.
Their current leader, though not the best public speaker is one of them.
I'm actually puzzled as to what purpose the CAP is serving at all in its present form other than to swallow money that ultimately indirectly finds its way into the multiples pockets.
The multiples reduce the price to the farmer but rarely to the consumer.It's the remaining farmers that are at the coal face trying to produce that food at a higher cost and a lower price.
Incidently I understand the system is different in France in that they sell a lot of their own produce themselves.
There are a few country markets around Ireland but nothing like the scale in France.
The way to go ,I'd imagine in cutting out the middle man and still maintain a respectable price to both the farmer and the consumer.
It won't be easy to encourage this though with the older Age profile and the apathy thats now been allowed to flourish in that industry.

Aidan1

They don't represent the interests of the small farmer, and it's the smaller farmers who are losing out, and it's the small farmers that the CAP was supposed to protect

On the contrary, and on both counts.

Firstly, the IFA is very much pro small farmer, the current president was elected by the small farmer lobby, much to the detriment of the organisation. Tom Parlon was not as dependent on that lobby, and the organisation benefitted from that also. Essentially, the IFA have to work out whether they are a pressure group aimed at defending an indefensible sector, using massively distorting subsidies as a form of rural social welfare or if they a producer representative organisation, which has constructive reform at the heart of their agenda.

Secondly, the CAP was established nominally to provide food security for Europe (in fact, by 1962 the original 6 were self sufficient in most products anyway), not to protect farmers. It became seen as such by farmers organisations, and governments. Repeated attempts were made by the Commission to break that link (the Mansholt reforms or "The Future of Rural Society" in 1988 being two examples) foundered as member states bowed to their farming lobbies.

The main failure of the CAP was that it encouraged the preservation of small farms, thus making European agriculture less efficient. This locked the Unions farmers into a cycle, policy change was always going to happen, but the more protected they became, the more painful any likely changes were going to be, the more determined they were to resist change.

IMHO, small farmers need a coordinated lobby group that links up with farmers in the global South to pressure governments, the EU, the WTO, large farmers and corporations for a better deal.

No, small farmers need to either diversify, or get out of the business while their land still has some value. Because land values will come down, and thats going to hurt a lot of people.

DadaKopf

Xterminator wrote:

I think that ther is no harm in farmers leaving the business, and their small farms being amalgamated into larger economically viable enterprises.

That sounds like the argument used by bigger farmers to justify the way the agricultural sector has gone. There's nothing necessarily economically unviable about smaller farms (not pea-sized obviously) as such provided that there are institutions and structures in place to make these farms sustainable. This can be done through co-ops, political challenges to big farmer lobby groups, legislation, farmers themselves capturing value added by getting into processing, organic farming, specialised foodstuffs etc. Don't we all talk about 'agribusiness' these days?

I know this is a trite thing to say, but my point is we all have to be careful about sayings like this - these kinds of arguments are usually told by big fellas to get ahead by telling their competition - the smaller, more vulnerable farmers - of the inevitability of mechanistic, corporate farming, when actually, this doesn't have to be the case if people do something about it.

You're basically saying we should all scrap our rural communities and a huge part of our national way of life, even if that's not what you really think.

And, it has to be reiterated, the same stuff is happening in the developing world. I find it really ironic and distressing, to be honest, that Irish farmers (unlike French farmers and others in Europe) don't see the massive common ground between the trade justice/Make Poverty History movements and their own local concerns. Made all the more ironic because farmers in the global South know the common links all to painfully.

Aidan1

There's nothing necessarily economically unviable about smaller farms

Well, not unless you actually want to make a living out of it. Apart from that, no.

Quick question, when the price of inputs goes up constantly, the real price for commodities falls dramatically due to competition, loss of subsidy and the power of purchasers, the costs associated with environmental regulations increase, the cost of living increases due to growth elsewhere in the economy and the SFP that was supposed to make up the difference wanes, what happens to farmers ability to make a living? I can't wait to hear your answer.

I find it really ironic and distressing, to be honest, that Irish farmers (unlike French farmers and others in Europe) don't see the massive common ground between the trade justice/Make Poverty History movements and their own local concerns

I'm sorry, I don't understand what you mean. Small farmers here rely on subsidies to keep them in business. These subsidies result in lower world prices for goods, and a lack of access to markets in the developed world for producers in developing countries. In short, keeping smaller farmers in business here through expensive subsidies keeps farmers in poor countries poor. What linkages?

sceptre

Imposter wrote:

I don't get you. Can you explain why eliminating them wouldn't create a fairer market?

I suppose I was basically saying that you've not demonstrated that it would. I said it might or might not and it's not good enough to claim that it would and base an argument on the assumption that it would. The major part of my post though was that a duty of care is owed to people, either individually or as a group, rather than "the market". Sod the market, the market doesn't have children.

fly_agaric

edanto wrote:

Why should we prop up an industry that leaks money, especially if it means that we're keeping poorer countries poor?

Eh.. because not everybody farms - but everbody does eat food!:)

DadaKopf wrote:

That sounds like the argument used by bigger farmers to justify the way the agricultural sector has gone. There's nothing necessarily economically unviable about smaller farms (not pea-sized obviously) as such provided that there are institutions and structures in place to make these farms sustainable. This can be done through co-ops, political challenges to big farmer lobby groups, legislation, farmers themselves capturing value added by getting into processing, organic farming, specialised foodstuffs etc. Don't we all talk about 'agribusiness' these days?

I know this is a trite thing to say, but my point is we all have to be careful about sayings like this - these kinds of arguments are usually told by big fellas to get ahead by telling their competition - the smaller, more vulnerable farmers - of the inevitability of mechanistic, corporate farming, when actually, this doesn't have to be the case if people do something about it.

One question occurs - will we ever be able to feed everyone if we don't farm on massive scales? The population rises. The amount of land for farming falls. "Organic" foods are basically just a nice fad for people with more money than sense - evil corporate-style farms on a massive scale are the only possible future for where most people get their food - unless you are expecting some type of cataclysm that will remove alot of mouths from the table.

In a completely free, global market without tariffs and subsidies, the people who can farm most intensively and cheaply will win out - i.e. Brazilian beef and sugar barons with "farms" the size of small European countries and lots of serfs to work for them at very low wages - not African small farmers trying to sell a bit on the side to Europe.

Ending the subsidies will probably accelerate the further scaling up and automation of European farming (assuming it doesn't damage it so much that we end up depending on US, Brazil, Australia etc for our food - not good for obvious reasons).
Ireland is too small in area for more than a handful of such massive farms, so finishing off subsidies completely probably will be the end of rural Ireland as we know it. Unless you count some organic farmers satsifying the tastes of those who can afford their produce.

Capt'n Midnight

we should also stop Corn subsidies and ban the import of soya for cattle feed. Better foods are displaced because these things are artifically cheap

C Fodder

In the 1970s and 80s the vast bulk of "farm subsidies" were paid directly to the meat and milk processors and not to the farmer leading to scandals like the farce of the beef tribunal and Larry Goodman getting richer and more powerful despite being guilty. A decision was taken in the 90s to direct a reduced amount subsidies directly to farmers but still tied to production levels. At the same time farm produce prices were reduced to closer to "World market levels" (a complete misnomer as less than 5% of all agricultural produce is traded this way and at this basement price). Recent developments are geared to recognising the distortions caused by production based subsidies so they were replaced with a single direct payment to farmers based on the historical level of subsidy received by an individual farmer!!. In other words a farmer who was farming subsidies for the last 10 years is rewarded with yet more cash and those farmers who were producing low or zero subsidy rated produce (yes there are plenty of those also) get nothing.

Many farmers recognise that if all subsidies were removed across the board then the people who have been playing the financial game will either have to work at farming or get out and leave the business to the farmers. However if all subsidies are removed then the so called consumer protections on agricultural produce need to be applied to all imports in the EU e.g. full traceability on meat, vetinary medicine controls to the same standard, disease controls to the same standard. All of the consumer protections are paid for by the farmer and if produce in allowed into the EU without these controls or these controls are paid for but the government of the country of origin then this is a subsidy on the foregin production. This is one of the means used by the USA to provide farming subsidies and still declaring that it is reducing direct farm subsidies.

Subsidies have played a vital role since the end of the second world war in securing food security for Europe and massively improving the diet of europeans. We have no thoughts about being able to afford a steak dinner or buy a range of cakes and confectionery or fruit and veg. Our grandparents weren't in this position apart from the lucky rich few. It is time for subsidies in their present and historical forms to go but the picture is bigger than a few farmers getting excessive cash payments for doing nothing.

In relation to poverty stricken farmers in the third world the reason for the low price they receive is that the local market cannot afford to pay western prices for food. Dropping the subsidies for western farmers and removing import tarrifs to western markets will only increase the income of the export farmers in these countries while pricing these food products out of the local markets and increasing the local food scarcity. Anyone remember of a country that was exporting food during famine? not too far from here?. The way to increase the price received by farmers in these countries is to raise the local income levels to the point where the locals are able to afford western or near western prices for food.

C Fodder

Sod the market, the market doesn't have children

The truest comment I've heard in a good while and the best reply to "market economics"

mike65

What do the farmers here think about the New Zealand big bang of the 1980s?

Mike.

edanto

fly_agaric wrote:

because not everybody farms - but everbody does eat food!

That makes no sense to me. But just to test your logic, let's extend it to some other things that everybody does. The government should subsidise clothes, electricity, toilet paper.....forget about it. And seriously, we're not going to run out of food. No species that's around today ever has.

C Fodder, thanks for providing such a clear analysis. The problem of how to ensure the quality of imports is probably solvable. But there is obviously a real difficulty in providing fair rules where there is such a disparity in the local value of the same currency around the world.

You mention the great advances that we've made in the past half century. A good deal of that could be attributed to our access to fair European markets and bundles of aid. So, maybe that would do the trick for poor countries.

Say cotton farmers, for example. Oxfam calculate that the value of US cotton subsidies in 01/02 was 30% greater than the overall value of the product in the US. Is that not the same behaviour they used to mock the USSR for?

Anyway, the value of the US cotton subsides, $3.9bn, is also greater than the entire GDP of Burkina Faso. The same subsidies cost Burkina Faso about 12% of it's GDP. That's one of the poorest countries in the world, so poor that a lot of it's debt was cancelled this year. My point is that this is a population being hurt by policies designed to buy votes in the west.

So yeah, there may be bad effects on our rural communities if we phase out subsidies, but are those people in danger of starving to death? I don't think so - they might have to sell the farm and we might have to import a bit of milk etc, but we'll all be okay.

Capt'n Midnight

Cotton - its the reason the Aral Sea is dry - the two main rivers flowing into have a greater combined flow than the Nile - or they did until the water was diverted into cotton fields.

fly_agaric

edanto wrote:

That makes no sense to me. But just to test your logic, let's extend it to some other things that everybody does. The government should subsidise clothes, electricity, toilet paper.....forget about it.

Sorry, I was being a bit flippant. I didn't think I'd be taken so literally. I would not like to see a situation develop where the EU is dependent on food imports of basic staples. If some kind of subsidies are needed to stop that from happening so be it.

edanto wrote:

And seriously, we're not going to run out of food. No species that's around today ever has.

All I can say is you are very naive if you believe that.
We don't need to "run out" either - we just need to have a shortage, or for some foriegn supplies we depend on to be unavailable for some reason or other. You think there's some natural law that says famines can only happen in Africa?

C Fodder wrote:

Subsidies have played a vital role since the end of the second world war in securing food security for Europe and massively improving the diet of europeans. We have no thoughts about being able to afford a steak dinner or buy a range of cakes and confectionery or fruit and veg. Our grandparents weren't in this position apart from the lucky rich few. It is time for subsidies in their present and historical forms to go but the picture is bigger than a few farmers getting excessive cash payments for doing nothing.

Sounds like sense to me.

edanto

fly_agaric wrote:

Sorry, I was being a bit flippant.

I'd better check the batteries in my sarcasm detector.

But am I naive to say we won't run out of food? I'd say it's more a confidence based on our history. The 'run out of food' worry was very prevalent 50 or 60 years ago, before the green revolution.... but I'll get into all that on your thread about food shortages if you want.

There isn't a natural law that says food shortages only happen in Africa, just a colonial heritage, discriminatory trade practices and the heat. Plus food shortages aren't their only or biggest problem... again, that'd be a whole other thread.

I started this thread to see if there was a consensus about the need to end farm subsidies and if anyone had any bright ideas about the system to replace them with. At least most of us are agreed they need to go - and maybe we can debate any alternatives when they're presented to us by the EU.

Capt'n Midnight

Oddly enough famines/food shortages are a a compartivaly recent ( since the move to the cities from farmers ) thing usually associated with buy and selling and controlling the supply of food.