By: Bitethehand

Bitethehand
Wed, 20 Nov 2024 06:59:22 +0000

In reply to HDG.

Here’s a contribution to the 2016 Brexit campaign, mainly by Phillip B. Whyman, Professor of Economics at the University of Central Lancashire.

“The Disaster that is the Common Agricultural Policy”

The European Union’s Common Agricultural Policy (CAP) was created in 1962 by the six founding countries of the European Communities of which France was one. It’s the oldest EU policy still in operation and has two pillars:

Income support and market measures:

and the second:

Rural development, which supports the economic viability and vibrancy of rural areas.

The CAP accounts for 38% of the EU budget of just over 140 billion and was designed mainly to support and protect inefficient small French farmers.

https://www.consilium.europa.eu/en/policies/cap-introduction/#:~:text=in%20the%20CAP?-,What%20is%20the%20CAP?,resources%20and%20respect%20the%20environment

‘At the present time, the CAP supports the 12 million (full time) farmers in EU member states, with an average farm size of 15 hectares. In comparison, the 2 million farmers in the USA have an average farm size of 180 hectares. Consequently, one unstated aim of the CAP system is to subsidise the continued survival of small-scale farming, whether for social or environmental reasons. If the agri-foods industry is included in the calculation, the food production sector accounts for 6% of EU GDP and is responsible for 46 million jobs. The CAP operates across all EU member states and thus the EU regime has replaced previous national forms of agricultural support. As such, agriculture is the only sector entirely funded from the EU budget.

…. the persistence of agricultural subsidies in the EU still distorts free trade and denies consumers the chance to buy products at world prices.

…… the Institute for Economic Affairs estimate that UK consumers are paying 17% more for food than we would under market conditions, whilst Milne suggests that the CAP could be costing the UK between 1.2 and 1.7% of GDP per year.

A second criticism is that this misallocation of resources was worsened by the decision to use export subsidies to sell the surplus produce at below cost price in the world market. This ‘dumping’ on world markets was singled out for criticism at the Doha World Trade Organisation talks in 2003. CAFOD are particularly vociferous in their criticism of the CAP as resulting in trade distortion and inflicting enormous damage to developing economies. Indeed, in a telling intervention, they noted that the average cow in the EU receives total support equivalent to US$2.20 a day, which is more than the income of half the world’s population. Moreover, the CAP has been identified as a potential cause of various health anxieties, ranging from claims that practices encouraged by the CAP have led directly to food safety issues such as BSE, or, more generally, to concerns that subsidising certain types of foodstuffs might be contributing to health problems.

The consequence for the UK fishing industry has been dramatic, as the number of vessels fell from 10,295 in 1994 to 6,406 in 2012, with a decline in fishermen from 20,751 to 12,450 during the same period. Moreover, the amount of fish landed in UK ports has experienced a similar decline, dropping from 948,000 tonnes of fish were landed from British vessels in 1970 to 417,000 tonnes in 2008. Indeed, this is only just above the level of 405,000 tonnes landed in 1943, when the North Sea was a warzone and U-boats sought to disrupt UK food supplies. As a result, despite its abundant natural marine resources, the UK has become a net importer of fish, to the value of ?2.66 billion per year, such that two-thirds of UK consumption is satisfied through imports. In addition to this loss associated with import penetration, it has been estimated that the Common Fisheries Policy costs the UK an additional ?2.81 billion annually; an estimate which included costs associated with unemployment (?138 million), net contributions to the CFP scheme (?65 million), the value of dumped fish (?130 million) and higher food prices factored into social security payments (?269 million). This equates to higher bills of around ?186 per household per year, or ?3.58 a week. Hence, it is not an exaggeration to conclude that the CFP has been an ‘unmitigated disaster for UK fishermen and UK consumers.’

Opposition to the CAP played a significant part in UK voters deciding to leave the EU.

So not socialist ideologues, but European Community bureaucrats.