Friday, October 19, 2012

Are UKIP wrong about the CAP?

Stuart Agnew MEP, the UKIP agricultural spokesman, has said the EU 'has become far too big to have a CAP.' There are certainly those who think that the EU is too geographically diverse to have a 'one size fits all' policy, although in practice it is not really like that. He also criticised farmers who receive subsidies for wind turbines and solar panels on their land as 'robbing the poor to pay the rich.'

European Commission official and agricultural economist John McClintock was trotted out to defend the CAP and said that scrapping the CAP 'could lead to food riots like we have seen in other parts of the world like Haiti.' This is scaremongering of the worst kind, but defenders of the CAP have seized on the food security card.

Mr McClintock is described as an agricultural economist, but he doesn't seem to have much love for the market mechanism. He said, 'There are still people who dream about the free market in agriculture, but the reality is that it could be socially disastrous.' Socially disastrous for whom, one has to ask?

Mr McClintock said that scrapping the CAP would mean that many farmers would not be able to survive. But is getting rid of marginal and inefficient producers necessarily a bad thing? He also argued that food prices would go up, but this could be offset if the EU lowered the high tariff walls it erects against much of the rest of the world. Defenders of the CAP argue that this helps the EU to be self-sufficient, but is it such a bad thing to import from countries well suited for agricultural production? Anyway, if one is concerned about self-sufficiency, perhaps there ought to be renewed attention to the quality of agricultural land when development takes place?

He also said that one of the main objectives of the CAP was to ensure that farmers had a comparable income to those in cities. Fair enough, but there are many people in rural areas who are not farmers and suffer from relative poverty. Surely this is a case for income supplements rather than subsidies to agriculture?

Similarly he argued that the CAP kept the countryside alive. But that is a case for transparent subsdies to keep the land in good heart and environmentally sustainable, not for blanket subsidies like the single farm payment.

The CAP costs €50bn a year and hardly represents value for money. 40 per cent or more of the EU budget represents a high opportunity cost. But, of course, we are where we are and withdrawing subsidies overnight would hit the rural economy hard. So it is incumbent on those who would withdraw from the EU to say what they would replace the CAP with in terms of domestic policy.

Labels: , , , ,

1 Comments:

Anonymous Non-sequitur said...

Quote: But, of course, we are where we are and withdrawing subsidies overnight would hit the rural economy hard. So it is incumbent on those who would withdraw from the EU to say what they would replace the CAP with in terms of domestic policy.

I wrote a piece on just how just that kind of situation could be dealt with, in a discussion that only briefly touched on the EU and was more concerned with the social economic effects at the rural level.

http://non-sequitur.co.uk/index.php/component/content/article/39-features/31-an-open-letter-to-prime-minister-david-cameron-december-2010

8:41 AM  

Post a Comment

<< Home