Friday, January 01, 2010

An economist who dislikes farm subsidies...

Even more than me.
Is there any policy more backwards, inefficient, and at direct benefit to the few and rich at the expense of the many and poor as agricultural subsidies? The European Union is offering some reminders that the answer is “no”.
Let’s run through the Terrible Policy Checklist. First up, does the policy benefit a cartoonishly inappropriate group of recipients?
…billions of euros pump haphazardly through the system at large, which last year rewarded a variety of beneficiaries beyond the simple farmer. At the head of the line were giant American and European factory farm companies, Spanish road builders, German Gummi bear manufacturers, luxury cruise ship caterers and wealthy landowners — including Queen Elizabeth II and Prince Albert II of Monaco.

As the EU begins to wrestle with the CAP, it could provide an interesting compare-and-contrast opportunity for the US.  Moreover, in their own plodding, incremental, endlessly negotiated style, they might surprise observers by stumbling in the right direction.

Five leading European farming and environmental NGOs, who between them boast several million members, have jointly published a blueprint for a new Common Agricultural Policy. In an unusual and very modern step, they have published a draft proposal and opened it for consultation. They will produce a final version in 2010. The proposal, which runs to 28 pages, is for a radical reorientation of the CAP away from a productivist and income support model towards a ‘public money for public goods’ ethos.
The proposal, which comes from BirdLife International, the European Environmental Bureau, the European Forum on Nature Conservation and Pastoralism, the International Federation of Organic Agriculture Movements and WWF, begins with a fierce critique of the current CAP. It is argued that most of the €55 billion spent by the EU on the CAP “still goes to a very small number of large or resource intensive farms, and all too often to those engaged in unsustainable practices.” The leaps in agricultural productivity in the EU over the past 50 years have
“been based primarily on unsustainable use of natural resources and has brought significant negative environmental effects.”
Specifically, the proposal refers to over-exploitation of water, over-reliance on fossil fuels inputs, soil erosion and depletion of soil fertility, loss of biodiversity, decline in the character of landscape, pollution of rivers and seas and increased pesticide residues in foods. Climate change means this model of intensive agriculture will become ever less sustainable than it already is. Meanwhile, European farming has shed much of its workforce and many of Europe’s remote rural areas are in apparently terminal social, environmental and economic decline. [More]

As we have been reminded often in the HCR debate, it is significant achievement to simply "bend the curve" of current policy trends. Combining this lower expectation with increasing insignificance of some current policies (LDP's?) and intense upcoming budget pressure, it is less far-fetched to imagine some gradual shift in our farm policy goals, and even more slowly, farm subsidy targeting.

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