Farming is not considered to be the most fashionable subject under political scrutiny. But this does all but diminish its importance, since it is quite clear that arguing for the importance of food production is superfluous. Arguments are required however, if we want to meet some of our long standing agricultural goals, such as quality, quantity, good prices and a relatively fair distribution. Now every country or political union faces difficulties in striving towards these aims.
These problems are, and will remain, hard to deal with for as long as they refuse to stand in line. It is no wonder therefore, that a large platform like the European Union is no exception. Agricultural affairs have always held a firm grip on its budget, as they still seem to do . We will not be able to tackle all of Europe’s problems at once; nevertheless some major problems shouldn’t be too hard in principle. In a nutshell we can summarize them under the headings of agricultural subsidies and quotas.
A part of this problem started back in 1984. From then onwards, farmers all over Europe have, one way or another, been held back by a maximum amount of milk that they were allowed to produce. The disposing of this policy has proved to be all but easy, even though it is illegitimate. Now we cannot say that there is too much food or milk in this world. If anything, there is too less. But our subsidies are distorting the global situation even further, as it weakens the position of other countries relative to ours. Even the slow-witted European politicians now realize this, though they are often held back by blinding pro-nationalism.
No surprise there: A quota can be seen as something which serves short- rather than long-term interest (and we all know what works best when voting campaigns are getting closer. Though England, at this moment at least, seems to be as disenchanted so as to head towards a long sought victory by the Tories). So to improve matters it might be a good thing to explicate why this is so, which is nearly the same as asking why and how we ended up where we are. I dare say many will come up with a host of ideas and explanations, some of them being romanticized forms of history, others fear-driven stories based on unwillingness to lose autonomy when it comes to food production. But of these accounts none will be either the actual cause or stepping-stone to a solution, because it all comes back to the same: We are distorting the market now and we used to distort the market. We’re only doing it in a different way, really.
To put matters plain and simple: The European governments have been systematically making their products attractive. Back in the days this was seen as necessary. You would’ve destroyed many companies if, after years of guaranteed good milk prices, you just took away all government financing. So you limit production, which creates the possibility to keep many businesses going. But countries went for globalization, an so did Europe. This left few alternatives. Other countries opened up their boundaries and did away with subsidies and import fees, so logically so did we. Only one exception remains accepted by the World Trade Organization (WTO), and that is indeed agriculture. Eventually it won’t make a difference though. Spreading the Day of Judgment for unprofitable companies over time prevents only one thing: Massive protests.
It cannot go on infinitely, since it blocks the implicit processes that regulate the market. And for years now not only politicians but also farmers have showed willingness for de-regularization. So why even write an article about it when it supports their views? Because the actual tearing down of this massive wall approaches, and now some seem to be in doubt whether that is a good thing. There are reasons for this, but I will mention only those two who seem to me as both most important and characteristic. The first is an expectation. A lot of things were hoped for in the ‘milk industry’ of late, but not a price that gives another blow instead of providing stimulus. Another is that the tough economic position of farmers makes it rather unsatisfying to observe that much money ends up with people who took no part in the actual production. These claims can be seen as legitimate, especially because the market only functions to a certain extent. It remains ironic therefore, that European farmers were granted a place in the economic crisis as well: They haven’t had the opportunity to participate in the free market, but they were granted the honor to participate in taking its blow.
Maybe that is another reason why we hear voices echo in protest, though in essence they remain no more than signs of fear of what’ll happen when government-run security evaporates. It only underlines the current doubts, which are part of an on lingering capitalistic feud (since we now know that unrestrained free-market, led by profit-driven, power-hungry capitalists didn’t make us any better off). Gladly that need not worry us at all, since only it’s extreme characteristics are to be eschewed. Haven’t we seen it’s opposite fail as well? And the measurements that the governments all over the world are now taking will hopefully suffice to spare us from another one of these economic humiliations, though I can imagine there being unwillingness to lay the fate of your life, even if partly, in the hands of politicians.
As clear as it is that things need to change, there are of course thing we shouldn’t do. One very simple proposition that falls into that category: Stop subsidizing at once, altogether. That would give a blow to many companies that can surely be competitive, only not at this moment. For we should realize that the policies by our governments have had a profound impact on the way people have handled their businesses and planned their futures. The way forward has long been regarded as expansion, expansion and expansion. This means that, where possible, many will have bought extra capacity to strengthen their position and increase their profit. In France some farmers will have bought more land, which comes with milk-quota, in order to be allowed to produce more milk, even though they strictly didn’t need nor wanted more land.
By just wiping out all quotas or subsidies we will therefore penalize those who tried to live with the system our politicians – with blurred vision and lost glasses – put in writing. Clearly, we should not. No one likes bureaucracy or extra costs. In any case this is unnecessary, especially relatively to our current situation, because the money involved in agriculture is huge. This can be used to our advantage. Instead of creating more obstacles to foreign companies, we need to prepare our own. Those who invested to improve their chances in the future should be compensated, at least as long as these investments can be seen as the result of government run policies. We should also note that, because we have been held back for such a long time, both infrastructure and fabrics have only limited capacity to handle milk production. The change should therefore be gradual, not immediate.
And to be honest, there are many things which can be done in order to improve our internal European agricultural market. No extra spending will even be needed. Think of lowering income taxes, gasoline prices (the so called ‘red gasoline’ used to be a lot cheaper, but the difference decreased substantially) and other fiscal advantages. This will affect the global market without endangering our friendship with the WTO, while improving and securing both production and delivery of food in our own markets.
In the end, this might indeed lead us to higher food prices in western societies. But we can bear the burden; it’s time we invest in something more important than a new Lexus. Many things are uncertain and obscure, but by now the way forward is at least globally clear. We neither want nor need extreme sponsors for farmers; they are, more than anyone, up to the challenge of shaping their own multi-tasked, some day profitable, businesses. We need to give them the opportunity, as quick and smooth as we can. So to take a leaf out of Electronic Art’s book: Need for speed!
Recent Comments