The Grauniad (of all papers) continues its libertarian crusade for free trade, slamming the EU’s continued protectionism of ag markets:
The European commission yesterday launched a ferocious attack on poor countries and development campaigners when it dismissed calls for big cuts in Europe’s farm protection regime as extreme demands couched in “cheap propaganda”.
In a move that threatens to shatter the fragile peace ahead of next week’s trade talks in Cancun, Mexico, Franz Fischler, the EU agriculture commissioner, said Brussels would strongly defend its farmers.
Note the condescending tone of the EUnik leading the charge on this one. Is it something they actually screen for? Is it in the water in Brussels?
“If I look at the recent extreme proposal co-sponsored by Brazil, China, India and others, I cannot help [getting] the impression that they are circling in a different orbit,” Mr Fischler reporters.
“If they want to do business, they should come back to mother earth. If they choose to continue their space odyssey they will not get the stars, they will not get the moon, they will end up with empty hands.”
Perhaps the big plus for free traders in all this is that this issue is not being posed as multinational corporations v. defenseless working class slobs (as antiglobalism is usually set up in the US), or as noble social democracies v. the evil capitalist US, but rather is put forth as poor and starving people v. coddled and protected industry.
Still, its a shame that it looks like the Doha round of negotiations will wither on the vine.
What disturbs me most is that they (primarily the EU) will STILL find a way to blame the whole world imbalance on the US.
Hold on a second, its not just the EU, Uncle Sam is no slouch when it comes to subsidising his farmers – or rather the agri-industrial complex.
The EU and the US farm subsidy regimes are a massive disortion of trade and a disgrace.
Reform of agriculture would raise developing world incomes the best way – through profitable trade.
The hipocrisy of the Leftists never cease to amaze me. They represent nobody but themselves and their stupidity. There are plenty of Third World countries that elect their leaders democratically and are clamoring to join the WTO.
Paul Staines, you’re forgeting Japan.
http://bureaucrash.com/blogs/hq/000183.shtml
America might be no slouch, but we did propose a cutback at DOHA to 15%, I believe. We’re slightly over 20%, but Europe’s over 30%.
HTY, you’re right. No one beats Japan and South Korea when it comes to agricultural tariffs and subsidies. But Europe is pretty bad, and so is the US. (Though the US is somewhat better than Europe.)
Would that all countries would emulate Australia and New Zealand in this area.
Fischler (an Austrian) is actually the best of a bad bunch. He tried to ram through some agricultural reforms, including cuts in subsidies, but a coalition of France, Spain, Portugal, Italy, Greece and Ireland stopped him. If he didn’t do the posturing described by the Guardian he would be toast and replaced by someone even worse.
These subsidies have to go or the EU will go sooner or later and I’d really hate it if I had to again show my passport at every border I come to
I think the EU will go sooner or later regardless of how the ag subsidies play out. Already, the monetary linchpin of the EU, the agreements limiting deficits to 3%, have been tossed overboard by France (and maybe Germany) whenever the required fiscal discipline is politically inconvenient. Without those agreements, the Euro will destabilize and inflationize, and the whole thing goes toes-up.
“Reform of agriculture would raise developing world incomes the best way – through profitable trade.”
Reforming agriculture subsidies will help Europeans (and Americans, and Japanese …) by letting them keep more of their hard earned money instead of taxing it away and giving it to agri-parasites. It will also eanble them to buy cheaper agri-products.
F**k the “developing world incomes”.
Blog-Irish addressed the need for Europeans claiming to be champions of justice for the developing world to assert themselves politically in our
August 20, 2003 posting, part of which follows:
POLITICIAN RUSHES IN WHERE CELEBS FEAR TO TREAD
U2 frontman Bono …
confessed … that he did not have the courage to take on the Irish farmer about how EU farm supports undermine third world economies.
Fianna Fáil TD Mr
Barry Andrews is made of sterner stuff.
The Irish Times reports
(Aug 19, 03) that at the Parnell Summer School the Dún Laoghaire TD called on the Government to abandon its support for the current EU farm subsidy system because of the damage being caused to developing countries.
He
To appreciate what kind of courage this takes, it must be remembered that two years ago, the efforts to protect farm subsudies by the French and the Irish government, lead by Mr Andrews’s party, nearly derailed the Doha trade talks:
(Irish Times, November 16, 2001).
….
We don’t think celebs who don’t have the courage of their convictions are worth much. But we think that politicians who do should be given pragmatic political support.
I have said some harsh things about libertarians and their preoccupation with trivial or academic issues on this board. One of the reasons I bother saying them is that we face a real danger that the progress made toward freedom in a really vital area — trade — has reached its high water mark, and that things could start going backward from here.
We have seen commentary to the effect that failure to reach agreement on farm subsidies at Cancun would be a disaster for trade liberalization overall. Well, failure is unavoidable at this point — Europe will not budge from its position on agriculture, and Japan and the United States will make no move to make them. So that commentary had better be wrong. Some progress is being made in other areas, and the Bush administration deserves some credit for that. But the Third World countries given the back of Herr Fischler’s hand yesterday feel with cause that the assurances they received as far back as the GATT talks in the 1980s that agriculture would be dealt with later if they made concessions on manufactured goods and other areas are not being lived up to. Europe is mostly to blame for that, but recent American policy has not helped, and the consequences could be very bad for everyone.
I don’t see how someone who doesn’t own their own farm and exclusively eat food that they themselves grow, can get off calling anyone in the agri-business “parisites.”
Agriculture isn’t like most other businesses… despite all the advances in refrigeration and transportation, their product will always be perishable, and so there is always pressure to sell it, even at a loss. Better to take a small loss than the big one that you would get if all your food spoiled, right? Due to market pressure, if one farmer begins selling at a loss, all the farmers in the area have no choice but to sell their food at a loss as well, or wind up with most of their food left unsold and rotting in the fields (resulting in them taking a big loss instead of a small one). Absent any regulation, the price of food will eventually drop so low that farmers cannot afford to operate their farms any more, and their farms get shut down. Then suddenly food becomes scarce, the price skyrockets, and people begin to starve, even though there are acres and acres of perfectly good farmland all over the nation. Eventually, farming becomes profitable again once the price of food rises enough, but not before large numbers of the poorer classes end up starving to death.
Farm subsidies and regulations are there to prevent this natural cycle from occurring. While lassiez-faire capitalists may piss and moan about the socialist nature of subsidies, the fact is that starving people are often violent people, and at the very least, rather uninterested in buying stuff that isn’t directly related to what they need to survive. They may be socialist in nature, but agriculture subsidies are the very best hedge against socialist revolution that has ever been developed. Just like people trained for violence are needed to keep the peace in our nation, so are some socialist programs needed to allow capitalism to flourish.
The EU’s comments are thoroughly fisked in the article “Let Them Eat Cake”
Perhaps the reason that the site–Mr de Havilland will administer a ceremonial rating to Zathras for calling it a “board” shortly, I imagine–gets heavily into what Zathras considers academic or trivial topics, is because on topics like this one there are few dissenters among libertarians and the libertarian-inclined.
So thanks, Tatterdemalian, for starting a fight. As a country boy, I agree that “agri-parasites” is a mis-placed insult applied to farmers who are just trying to earn a living in the way they always have, but I think you have the wrong end of the stick. It is a valid term for those lobbyists and politicians and bureaucrats who are the real beneficiaries.
The smoothing effect that you claim for agricultural subsidies isn’t real. In Europe, at least, the policy swings around as wildly as the weather. And in all the heavily protected “first world” economies, farmers form a small minority of the population, whose margins are a very small part of retail food costs. No one here is going to suffer a food shortage if some farmers go bust. One of the least subsidised parts of European agriculture is the pork industry, which is subject to vicious cyclical swings that bankrupt lots of pig-farmers every few years. Most bacon-buyers will never hear about it.
Farmers and agricultural workers may not like to do something else, but our developed economies and transport systems allow them to do so if they want.
Then there are the really starving people. In predominantly rural countries, there are a lot of people who depend on agriculture. A lot of them are subsistence farmers in whgole or in part. When things go wrong they DO starve. This doesn’t much bother the elites in those countries, who are often gobbling up dumped food and suppressing prices in the local market, and seizing any surpluses, to preserve their often urban power bases. Agricultural free trade (both international and intra-national) would likely feed a lot of currently starving people, because the marginal farmers could then sell their surpluses and save against famine. Starving people generally aren’t the ones you have to watch out for, it’s the armed gangs that stole their food.
Tatterdemalian,
Why aren’t there such disastrous overproduction and bust cycles in the, say, shoe industry or car industry or whatever ?
Everyone demanding a governmet subsidy claims to be a unique and indispensable case, and if the subsidy is denied – then the world ends.
Your argument sounds so … 1913.
There is an industry with really wild swings as bad as agriculture and just as important to the economy. The chip making industry.
Prices have been depressed for three years and the layoffs and job losses are horific.
Why no call for government intervention in so serious a situation?
Very interesting post
HTY, you’re right. No one beats Japan and South Korea when it comes to agricultural tariffs and subsidies. But Europe is pretty bad, and so is the US. (Though the US is somewhat better than Europe.)
Would that all countries would emulate Australia and New Zealand in this area.
We don’t think celebs who don’t have the courage of their convictions are worth much. But we think that politicians who do should be given pragmatic political support.
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