Post by SovietPrussia on Oct 10, 2009 13:11:54 GMT -5
I wrote this essay for English not too long ago. With the recent advances with the Lisbon Treaty sparking a renewed Euroscepticism. Basically, this is my rant/critique of the Common Agricultural Policy of the European Union.
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Behold! The magnificent plantations of Kazakhstan; The country’s most prominent testament to the glorious Soviet Revolution! To break with character, I refer to the cotton plantations set up by the Soviets in the 1960s. The government diverted the Ama Dariya and the Syrdariya rivers to irrigate the desert so the white gold would grow. But those two rivers fed the once mighty Aral Sea, which has now all but dried up. What water it has left is polluted with fertilisers and high salt concentration. And it’s the local people who have to deal with the increase in tuberculosis and cancer cases and of course the indescribably tragic 3000% rise in infant mortality. Just so a failed communist system could sustain itself. 40 years into the future, the Cold War is over. The Berlin Wall has fallen, the Ceauşescus are dead, and Gorbachev is our friend now. But the Common Agricultural Policy of the European Union seems to have not got the message. A policy all about protectionistic price controls, immense overproduction, and bureaucratic central planning. Sound familiar? Maybe the Evil Empire isn’t quite gone yet. Economics was at the heart of the clash of ideologies during the Cold War. It’s no less important now. As the great Oscar Wilde put it, “When I was young I thought that money was the most important thing in life; now that I am old I know that it is.” Economic recovery from this recession is on everyone’s minds. Getting us out of the woods is every government’s number one priority. But fiscal responsibility can’t be neglected either. We don’t want to enter the next boom having to pay for out of control compound interest. We need to have a look at ourselves. We need to cut back on unnecessary government spending so it can be put to better use elsewhere. Top of the list is CAP. Put simply, it has got to go.
We’ve all heard the stories of the famous butter mountains, the wine lakes, the seas of milk. It seems odd to be spending 40% of the EU’s budget on producing food we don’t even use. What we do with all that excess wheat is sell it to the developing world. Because of the subsidies we offer farmers, they can easily afford to undercut any Liberian rice farmer. Now if this was happening to us, our economies wouldn’t suffer too much damage. After all, only 5% of us work in agriculture. But for a developing nation such as Bangladesh, 63% of people work in farming. Their governments offer little or no support so they simply cannot compete with us. And besides, we have the highest-end technology available for other, more profitable sectors of industry. I fail to see any point in depriving developing nations from a major source of their economic growth while we spend so much to support 2% of the least profitable sectors of our economy. The Washington Consensus isn’t working for the Developing World. We apply pressure on them to liberalise and open their markets, but we do the exact opposite. And while CAP undermines the rest of the world’s economies, prices are kept artificially high by a guaranteed price we offer farmers for their produce. Because labour is considerably cheaper in less economically developed countries, the final price of food should be cheaper here if it wasn’t so expensive and complicated for those farmers to sell their produce in Europe. A number of tariffs and trade restrictions have put the icing on the cake of protectionism; baked using the finest price-guaranteed flour we made a hill out of earlier today. Taxing foreign goods simply because they’re, well, foreign is unbelievable. Refusing to give someone a job because they’re Estonian or Tajikistani is racism and was made illegal years ago. But it seems that the same principles don’t apply to trading in general. Back in 1930, when the Great Depression was just beginning, the Smoot-Hawley Tariff was passed in the United States to protect their failing economy from outside competition. All this succeeded in doing was making it harder for European nations to trade with the US, so their economies suffered even more. It also triggered a trade war with Britain. The Ottawa Conference put up enormous tariffs on imports from most of the world, reducing international trade even more. Germany, which had built its prosperity in the Stresemann years on American investment, was the most severe case of trade policy gone wrong. In less than three years after the Smoot-Hawley Tariff was passed, the Nazi Party had risen to power. Quite simply, if protectionism in the form of CAP is allowed to continue, the economies of Britain, Europe and the world as a whole will not prosper as fully as they should.
The Green Revolution has done so much good for the supply of food in the world. Mexico went from importing half of its wheat in 1943 to exporting 500,000 tonnes in 1964. Note that this was achieved thanks to the funding from The Rockefeller Foundation and the Ford Foundation. Both chartered by the famous American industrialists Henry Ford and John Rockefeller, and not by a centrally planned government program. In India, the famine of 1961 ended because of the Green Revolution greatly increasing rice yield in the country. When CAP was introduced in 1958, the Revolution was not in full swing. The policy may have been justified back then when Europe was still in recovery from the Second World War. But with the surge in food production a few years later, CAP became obsolete. Rather than let the developing world capitalise on the Revolution, Europe persisted. The liberalisation of the Developing World and the de-liberalisation of the Developed World meant that farmers in Botswana, Pakistan and the Philippines found it hard to compete and saw considerably smaller profits. Smaller profits meant less reinvestment. Less reinvestment means fewer jobs are created and less food is grown. The WTO did try to apply pressure onto European governments to cut back on CAP. And to a limited extent it worked. They succeeded in making the taxpayer subsidise farmers not to use their land which takes the digging holes and filling them kind of job to a whole new level. Sometimes they’d diversify into new ways to make money. I’d say fair enough. Nothing wrong with branching out in principle. But I can’t help but feel resentful after spending a week camping in an empty Devonshire field where the toilets didn’t work and then be expected to pay £100 a night for it. Food production did decrease, and just in time for 2007-08 food crisis. This shows an utter lack of dynamism in the system which is incapable of responding to changes in the market. It should also be pointed out that the World Bank concluded that biofuels production in the USA and EU was the primary cause of the sudden surge in prices. Not only did the European Union create the mess, they just proved how ineffective their CAP is.
CAP is a sad waste of 45% of the EU’s budget. A bloated Soviet-esque protectionist measure to keep uncompetitive farmers happy. Abolishment is the only option. The money saved could be used for a great number of more deserving areas. Maybe developing nuclear power programs to get us off fossil fuels quickly. Perhaps it could be spent on maintaining sites of national, historical or cultural importance. Help the Poles wean themselves off agriculture for more profitable industries by funding education programs to make sure the next generation are best equipped for a changing world. If they’re feeling ambitious they could decrease the size of the budget and national governments could pass the savings on to their own people in tax cuts. Then I’d be more enthusiastic to sing, as the Anthem of Europe goes, Thy magic shall unite, ever, Those nations that which were not.
Bibliography
Aral Sea - news.bbc.co.uk/1/hi/world/asia-pacific/678898.stm
40% of EU Budget - ukinhungary.fco.gov.uk/resources/en/power-point/ppt1/posthu_johannacowanpres
EU Employment by Sector and GDP Information- www.cia.gov/library/publications/the-world-factbook/geos/ee.html
Bangladesh - www.cia.gov/library/publications/the-world-factbook/geos/bg.html
Green Revolution - www.mexconnect.com/articles/3393-did-you-know-the-green-revolution-began-in-mexico
GR in India - agron.scijournals.org/cgi/content/abstract/60/6/643
World Bank, Biofuels - www-wds.worldbank.org/external/default/WDSContentServer/IW3P/IB/2008/07/28/000020439_20080728103002/Rendered/PDF/WP4682.pdf
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tl:dr: Abolish it naugh!
Anyway, your thoughts on it?
I'd also like to say on a more general note, the EU could make a handy free-trading club, but it needs desperate reform. It has to get rid of that European government idea; or at the very least give the EU parliament significantly more power than the Commission.
-------------------------------------------------------
Behold! The magnificent plantations of Kazakhstan; The country’s most prominent testament to the glorious Soviet Revolution! To break with character, I refer to the cotton plantations set up by the Soviets in the 1960s. The government diverted the Ama Dariya and the Syrdariya rivers to irrigate the desert so the white gold would grow. But those two rivers fed the once mighty Aral Sea, which has now all but dried up. What water it has left is polluted with fertilisers and high salt concentration. And it’s the local people who have to deal with the increase in tuberculosis and cancer cases and of course the indescribably tragic 3000% rise in infant mortality. Just so a failed communist system could sustain itself. 40 years into the future, the Cold War is over. The Berlin Wall has fallen, the Ceauşescus are dead, and Gorbachev is our friend now. But the Common Agricultural Policy of the European Union seems to have not got the message. A policy all about protectionistic price controls, immense overproduction, and bureaucratic central planning. Sound familiar? Maybe the Evil Empire isn’t quite gone yet. Economics was at the heart of the clash of ideologies during the Cold War. It’s no less important now. As the great Oscar Wilde put it, “When I was young I thought that money was the most important thing in life; now that I am old I know that it is.” Economic recovery from this recession is on everyone’s minds. Getting us out of the woods is every government’s number one priority. But fiscal responsibility can’t be neglected either. We don’t want to enter the next boom having to pay for out of control compound interest. We need to have a look at ourselves. We need to cut back on unnecessary government spending so it can be put to better use elsewhere. Top of the list is CAP. Put simply, it has got to go.
We’ve all heard the stories of the famous butter mountains, the wine lakes, the seas of milk. It seems odd to be spending 40% of the EU’s budget on producing food we don’t even use. What we do with all that excess wheat is sell it to the developing world. Because of the subsidies we offer farmers, they can easily afford to undercut any Liberian rice farmer. Now if this was happening to us, our economies wouldn’t suffer too much damage. After all, only 5% of us work in agriculture. But for a developing nation such as Bangladesh, 63% of people work in farming. Their governments offer little or no support so they simply cannot compete with us. And besides, we have the highest-end technology available for other, more profitable sectors of industry. I fail to see any point in depriving developing nations from a major source of their economic growth while we spend so much to support 2% of the least profitable sectors of our economy. The Washington Consensus isn’t working for the Developing World. We apply pressure on them to liberalise and open their markets, but we do the exact opposite. And while CAP undermines the rest of the world’s economies, prices are kept artificially high by a guaranteed price we offer farmers for their produce. Because labour is considerably cheaper in less economically developed countries, the final price of food should be cheaper here if it wasn’t so expensive and complicated for those farmers to sell their produce in Europe. A number of tariffs and trade restrictions have put the icing on the cake of protectionism; baked using the finest price-guaranteed flour we made a hill out of earlier today. Taxing foreign goods simply because they’re, well, foreign is unbelievable. Refusing to give someone a job because they’re Estonian or Tajikistani is racism and was made illegal years ago. But it seems that the same principles don’t apply to trading in general. Back in 1930, when the Great Depression was just beginning, the Smoot-Hawley Tariff was passed in the United States to protect their failing economy from outside competition. All this succeeded in doing was making it harder for European nations to trade with the US, so their economies suffered even more. It also triggered a trade war with Britain. The Ottawa Conference put up enormous tariffs on imports from most of the world, reducing international trade even more. Germany, which had built its prosperity in the Stresemann years on American investment, was the most severe case of trade policy gone wrong. In less than three years after the Smoot-Hawley Tariff was passed, the Nazi Party had risen to power. Quite simply, if protectionism in the form of CAP is allowed to continue, the economies of Britain, Europe and the world as a whole will not prosper as fully as they should.
The Green Revolution has done so much good for the supply of food in the world. Mexico went from importing half of its wheat in 1943 to exporting 500,000 tonnes in 1964. Note that this was achieved thanks to the funding from The Rockefeller Foundation and the Ford Foundation. Both chartered by the famous American industrialists Henry Ford and John Rockefeller, and not by a centrally planned government program. In India, the famine of 1961 ended because of the Green Revolution greatly increasing rice yield in the country. When CAP was introduced in 1958, the Revolution was not in full swing. The policy may have been justified back then when Europe was still in recovery from the Second World War. But with the surge in food production a few years later, CAP became obsolete. Rather than let the developing world capitalise on the Revolution, Europe persisted. The liberalisation of the Developing World and the de-liberalisation of the Developed World meant that farmers in Botswana, Pakistan and the Philippines found it hard to compete and saw considerably smaller profits. Smaller profits meant less reinvestment. Less reinvestment means fewer jobs are created and less food is grown. The WTO did try to apply pressure onto European governments to cut back on CAP. And to a limited extent it worked. They succeeded in making the taxpayer subsidise farmers not to use their land which takes the digging holes and filling them kind of job to a whole new level. Sometimes they’d diversify into new ways to make money. I’d say fair enough. Nothing wrong with branching out in principle. But I can’t help but feel resentful after spending a week camping in an empty Devonshire field where the toilets didn’t work and then be expected to pay £100 a night for it. Food production did decrease, and just in time for 2007-08 food crisis. This shows an utter lack of dynamism in the system which is incapable of responding to changes in the market. It should also be pointed out that the World Bank concluded that biofuels production in the USA and EU was the primary cause of the sudden surge in prices. Not only did the European Union create the mess, they just proved how ineffective their CAP is.
CAP is a sad waste of 45% of the EU’s budget. A bloated Soviet-esque protectionist measure to keep uncompetitive farmers happy. Abolishment is the only option. The money saved could be used for a great number of more deserving areas. Maybe developing nuclear power programs to get us off fossil fuels quickly. Perhaps it could be spent on maintaining sites of national, historical or cultural importance. Help the Poles wean themselves off agriculture for more profitable industries by funding education programs to make sure the next generation are best equipped for a changing world. If they’re feeling ambitious they could decrease the size of the budget and national governments could pass the savings on to their own people in tax cuts. Then I’d be more enthusiastic to sing, as the Anthem of Europe goes, Thy magic shall unite, ever, Those nations that which were not.
Bibliography
Aral Sea - news.bbc.co.uk/1/hi/world/asia-pacific/678898.stm
40% of EU Budget - ukinhungary.fco.gov.uk/resources/en/power-point/ppt1/posthu_johannacowanpres
EU Employment by Sector and GDP Information- www.cia.gov/library/publications/the-world-factbook/geos/ee.html
Bangladesh - www.cia.gov/library/publications/the-world-factbook/geos/bg.html
Green Revolution - www.mexconnect.com/articles/3393-did-you-know-the-green-revolution-began-in-mexico
GR in India - agron.scijournals.org/cgi/content/abstract/60/6/643
World Bank, Biofuels - www-wds.worldbank.org/external/default/WDSContentServer/IW3P/IB/2008/07/28/000020439_20080728103002/Rendered/PDF/WP4682.pdf
--------------------------------
tl:dr: Abolish it naugh!
Anyway, your thoughts on it?
I'd also like to say on a more general note, the EU could make a handy free-trading club, but it needs desperate reform. It has to get rid of that European government idea; or at the very least give the EU parliament significantly more power than the Commission.
