Tag Archives: Farmers

The Common Agricultural Policy and the UK general election

EU Member States are obliged by the European Union to make available the data on recipients of Common Agricultural Policy money by 30th April each year, with data from the preceding year. Today is 1st May and Defra has put this message on its CAP payments website:

Due to the General Election campaign, this website will not be updated with the 2009 figures until after the election.

What the hell is going on?

OK, civil servants during the election period are restricted in what they can do due to the purdah rules. But the main gist of the Cabinet Office guidance for the period is this (from here):

During an Election campaign, the Government retains its responsibility to govern, and Ministers remain in charge of their Departments. Essential business must be carried on. However, it is customary for Ministers to observe discretion in initiating any new action of a continuing or long-term character. Decisions on matters of policy on which a new Government might be expected to want the opportunity to take a different view from the present Government should be postponed until after the Election, provided that such postponement would not be detrimental to the national interest or wasteful of public money.

There is absolutely nothing new about publishing CAP data. It is a long standing obligation under EU law that the UK government has to respect. So why are they not doing it? Which minister fears the release of this data now? Or is it just pure risk aversion somewhere?

In the meantime if you want to see who got what in 2008, constituency by constituency, then see Farmsubsidy’s excellent election website.

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One rule for farmers, another rule for everyone else

Cow - CC / Flickr

Cow - CC / Flickr

I managed to avoid the milk-farmer chaos in Brussels on Thursday and Friday – hundreds of tractors driving slowly to bring protests about low milk prices to the European Council. But what exactly are the farmers whingeing about, and what should be done about it?

This piece from EUObserver has more – it costs €33 to produce 100 litres of milk on a Belgian farm, and wholesalers are buying milk for just €19 per 100 litres. The farmers would ideally like a price of €44 per 100 litres. In any normal sector of the economy the high-price producers would go out of business, and those that can produce at a lower price would get the business, profiting from economies of scale or better technology. Look at how OPEC works – reduce production to drive up prices. Sorry to put it bluntly, but if the prices are too low, then some cows are going to have to be slaughtered.

Another alternative would be to appeal to customers that might be more inclined to buy local rather than imported milk, and pay a premium for the privilege – some equivalents of the British Farm Standard scheme might do to the job.

But what do the farmers do instead? They come complaining to the European Commission, and governments in each of the Member States, whining that something should be done to help their plight. It’s the EU’s plan to phase out the quota system for milk that is to blame they bleat – the very quotas that were introduced in the 1980s to prevent over-production of milk and were detested by milk farmers at that time. Keep the quotas, keep our prices up!

The EUObserver piece quotes a farmer: “It’s not a problem of the stores, it’s a problem of a regulation by the states and overall by Europe” – no. The problem is with the farmers who cannot except the logic of simple market forces. If the price of milk is too low, then produce less. Don’t produce at a loss and then go begging for assistance from the EU.

(Apologies if this article is really wide of the mark – I’ve scoured the web and cannot find anything except hot air and hollow rhetoric from farmers on this – if I’m missing some fundamental point to the economics behind this then please do tell me in the comments)

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