Thursday, February 14, 2008

A close second...

Sometimes being the runner-up has an advantage. Consider this example: our dairy program.

Not only is the marketing scheme barely comprehensible, the pricing mechanism would make a Dickensian attorney proud. But even with that, our cousins in Europe make us look practically like a free market.
Perverse effects abound. German farmers from the plains of Schleswig-Holstein would “love to see no quotas”, says an official. Yet the German government is resisting reform. This is said to be because the German farm minister is both ambitious and from Bavaria, a hilly place with lots of small farms. France fell far short of its quota last year, thanks in part to a system of state planning that ties quotas to individual regions, to prevent concentration of the industry in profitable areas. In practice, this means that frustrated dairy farmers in Brittany and Normandy cannot expand, while quotas languish unused in other regions. French officials proudly proclaim that EU quotas are the reason that milk is still produced in every corner of France.

This is all especially pleasing to Michel Barnier, the French agriculture minister. He is from the Alps, and likes to say that one EU priority must be to save European palates from industrial, “aseptic” food. One Eurocrat says more bluntly that the French have “decided to save mountain farmers by kicking farmers in Brittany”. And while gourmet France under-produces, industrial America has been “flooding” world dairy markets, he adds: perhaps not the outcome France had in mind. [More]
The irony is, as we are poised on the brink of a possible decade more of our dairy policy, the EU is moving glacially in the direction of limiting payments and policy reform.

Or not.

If we are gaining market share from the quota-bound Europeans, we can only imagine how fast free marketeer competitors like New Zealand are expanding to serve the expanding Asian market.

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