French Parasites

I've been struggling for a long time now to contain my anger at the way Tony Blair's been conducting the EU budget negotiations, not just because of the recalcitrance of parties like Poland which arrogantly insist on acting as if the aid were theirs by right rather than the coerced transfer of funds from citizens of other nations that it is, but even more so because right from the start the pusillanimous Blair seemed to take it as given that the Common Agricultural Policy was untouchable at least for now, with the most that could be hoped for being renegotiations in 2009. This Times article shows why my anger at Blair's timidity on this issue is so thoroughly justified.

FRENCH farmers were accused of holding Europe and the world to ransom yesterday after official figures obtained by The Times revealed just how far European Union subsidies are skewed in their favour.

Three times as many French farmers receive large subsidies from the EU than those of any other country. In total, France receives almost twice as much direct subsidies for its farmers as any other member state, and they are mostly channelled to large farmers rather than traditional small-scale land holders.

Despite the huge discrepancies France steadfastly refuses to countenance any reduction in farm subsidies, bringing the EU budget negotiations in Brussels and the World Trade Organisation talks in Hong Kong, both climaxing this week, to the brink of collapse.

Dominique de Villepin, the French Prime Minister, declared yesterday that France would veto any EU budget agreement at tomorrow’s Brussels summit, or world trade deal, that entailed cutting farm subsidies before the EU’s next seven-year budget ends in 2013. “We will not accept an accord that obliges Europe to start a new reform of the Common Agricultural Policy,” he told the French Parliament.

France's farmers are the parasites of the European Union, subsidy-hungry leeches who do little more than destroy taxpayer value while ruining the livelihoods of millions of poor farmers throughout the rest of the world, yet instead of the British government demanding that they wean themselves off the EU teat, it is the French who have the temerity to insist that Britain and the rest of Europe continue to subsidize this wealthy coterie of rent-seeking layabouts. Why is it that Blair cannot bring himself to take as strong a stand as the French can and do, even when the weight of justice is so clearly on his side?

This ridiculous situation in which the French wreckers of all progress are the ones making demands and expecting them to be be met is what comes of having a government led by a Europhile who wants so strongly to be liked by the more-sophisticated continentals who supposedly lie on the other side of the Channel: had Gordon Brown and the prospect of an unwinnable referendum not managed to restrain Blair's uncritical Europhilia, we'd all be using the Euro by now and suffering the consequences of it, all in the name of not being "left behind" and isolated. Oh for the days of Margaret Thatcher and her handbag!

PS: As this article makes clear, the wealthy parasites who benefit from the CAP aren't limited to France, though wealthy Frenchmen do make up the lion's share of beneficiaries. No wonder the majority of the EU elite seems to love the lunatic CAP so much - many are on the take themselves.

Comments

[VH]

@dsquared:
"not to poor countries in general - two weeks ago or so I read a paper which tried to estimate the whole shabang"

I can only judge first hand from the Philippines, where I stay half of the year. Their crops are mostly coconut and pineapples. EU farmers didn't yet manage to grow those.

As to diary products (cows don't thrive well in the tropics), and looking at supermarket shelves all over the country, I only see New-Zealand stuff.

Corn and sugar might be a problem. But corn is mostly used as livestock food, and there are serious efforts to convert sugar into ethanol to alleviate the rising oil bill.

There is another aspect why EU food doesn’t really compete with local crops, and that is roads-to-market. Most roads are dust roads and no decent truck can use it. Many crops are just processed locally. In case of virgin coconut oil (an important export product), the final product is brought to collection stations by sheer manpower, not by mechanical transport.

[ivan]

I think that the evidence is fairly conclusive (see Arvind Panagyria, Jagdish Bhagwati, studies of the World Bank: http://econ.worldbank.org/external/default/main?theSitePK=544849&contentMDK=20716544&pagePK=64168182&piPK=64168060), that eliminating subsidies, especially export subsidies will hurt instead of benefit the poorest countries. Most of them are net importers of food. This empirical evidence gets by the way some political credibility due to the fact that the elimination of those subsidies are demanded not by the poorest countries but by middle-income countries like Brazil and India, who have an comparative advantage and are net-exporters.

Agricultural reforms have only positive results for the real poor countries when it is comprehensive: when not only subsidies but all other barriers (tariffs, quota’s, non-tariff barriers) against market entry are eliminated. In fact the poor countries will gain most if those barriers are lifted not only by the West, but by countries like Brazil and India. Their barriers are indeed much higher than those of the U.S. or Europe. But they don’t want to lower tariffs which is why they concentrate on subsidies, where the West is the major villain. And Oxfam of course obliges. But it’s doubtful if they will help the most neediest this way.

Whatever the case, subsidies, and again especially export subsidies, are only a small part of the gamut of protectionist measures in place anyway. If we really want to help the poorest of the poor concentrating on that small part, and ignoring the big picture of overall protectionism, is not what we should do.

As Pietra Rivoli writes in her book about the textile industry, eliminating subsidies will not help farmers in the third world very much, at least not in the short term. Eliminating subsidies is a start but it will not eliminate the real causes of their poverty: the lack of education and reading skills, the lack of property rights, the lack of commercial infrastructure and scientific program’s. All the things where Oxfam (and, I’m sorry to say because I’m one of them, many free traders) do not fight for. In fact, it’s their own government policies (if any), and not that of the U.S. (cotton) or Europe (sugar), that keeps them poor.

We in the West should not be proud. The CAP remains a disgrace and a disaster. It teaches the third world that they should emulate this kind of government intervention, which they of course should not do. That’s why we should ditch the CAP. If we want to try to persuade third world governments that liberalization and free markets is the way forward, for them also, we should set the example and eliminate all kinds of protectionism (N. Gregory Mankiw by the way proposes the use of the word isolationism), starting with the most hurtful: those that limit market access.

[dsquared]

[Oh yeah, and as far as Mas-Collel goes, it's there, it's just presented as a more general case (since there's really nothing about either the Ricardian model or the HO that says it has to be between nations). ]

If I'd been thinking about this straight for even a minute I'd have realised this, thanks.

Abiola; unsurprisingly, liquid milk is not exported to Africa from Europe. Butter is, and so are powdered milk products.

[dsquared]

[As to diary products (cows don't thrive well in the tropics), ]

It's not so much that (as Abiola points out, a lot of Africa isn't tropical) as the fact that cows can eat lots of things, but green grass is one of the cheapest and produces the best milk. Personally, whatever happens to agriscience, I am likely to continue to drink organic milk from the UK, because a) I can taste the difference between milk from grass-fed and feed-fed cows and b) I drink milk from cows who aren't fed antibiotics because I like to pay the extra to get milk, rather than a mixture of milk and pus.