Bell Curve The Law Talking Guy Raised by Republicans U.S. West
Well, he's kind of had it in for me ever since I accidentally ran over his dog. Actually, replace "accidentally" with "repeatedly," and replace "dog" with "son."

Monday, June 27, 2005

CAP Reply (from our French correspondent)

I have a friend who works for the EU in Belgium and she wanted to reply to RbR's earlier post about eliminating the CAP. She has been informed that she could post it herself but for whatever reason, I received her reply and so I'm posting it in its entirety below the fold, in the original French. For those non-Francophones among us, let me summarize her main points.

She agrees with RbR that the farmers are a bit silly to be blaming the EU for their problems even though it has helped them tremendously. But she does not agree that it is a good idea to totally ditch the CAP. She points out the reforms that have taken place, the amount of money already put into the project, and the fact that Europe does not want to be totally dependent on foreign production for its food. She goes on to talk about the UK and their exception and how the EU is getting used to (sick of?) the UK wanting to make themselves different for whatever reason.

If any of our French speakers (e.g. USWest) wants to go into more detail on this nicely written piece, please feel free to do so in the comments! Again, the full text is below.

On dit « cracher dans la soupe ». Les agriculteurs français ont en effet largement bénéficié des fonds de la PAC…mais ils la rendent responsable de tous leurs maux. Notamment, les dysfonctionnements liés à la surproduction ont compliqué le système : on encourage la production, et puis on fixe des quotas (avec aides au départ à la retraite et à la mise en friches ou au gel des terres entre autres)…tout cela n’est pas très cohérent. Les institutions communautaires, chose incroyable, s’en sont aussi rendues compte. C’est pourquoi la PAC a été complètement réformée. Son objectif premier est toujours de permettre aux agriculteurs de rester compétitifs même en imposant des prix de vente plus élevés que les cours mondiaux. Mais elle tient de plus en plus compte de la qualité des produits et encourage l’agriculture biologique.
Pourquoi ne pas totalement laisser tomber un secteur qui ne représente que 4% de l’emploi ? Parce que la PAC a déjà englouti des sommes gigantesques…mais aussi parce qu’il est difficile d’imaginer une Union européenne totalement dépendante de la production mondiale. Il est toujours nécessaire d’entretenir les productions européennes, ne serait-ce que pour sauvegarder un peu de notre identité…Les fonds de la PAC ont déjà été revus à la baisse et réorientés vers des objectifs moins grandioses.
Quant au Royaume-Uni, l’Union a l’habitude de ses caprices. Le rabais ne sera probablement pas supprimé en une fois, et la PAC ne disparaîtra sûrement pas du jour au lendemain. L’histoire de la construction européenne est remplie de compromis politiques, et la crise qu’elle vit en ce moment se résoudra de cette manière. Personnellement, je crois que la position du Royaume-Uni n’est pas tenable au vu des sommes considérables nécessitées par le dernier élargissement. L’Union est notamment basée sur le principe de la solidarité entre ses Etats membres. Or, le Royaume-Uni est loin d’être à plaindre ces derniers temps. Lors du dernier Conseil européen des 16 et 17 juin, certains des nouveaux Etats membres ont proposé de réduire leurs subventions pour financer le chèque anglais, afin que les négociations avancent, proposition qui a provoqué la colère de M. Juncker…
N’oublions pas non plus que le Royaume-Uni se met lui-même en-dehors de beaucoup d’avancées politiques et juridiques (monnaie unique, accord de Schengen) : une Europe à la carte est-elle souhaitable ? Va-t-on évaluer de quelle façon chaque Etat bénéficie de telle ou telle politique pour ensuite réévaluer sa contribution ? Quant au slogan du Royaume-Uni qui tend à faire croire que l’Union européenne ne se préoccupe pas de l’emploi…il n’y a qu’à prononcer « modèle social européen » pour faire dresser les cheveux sur la tête de Mr Blair…


Anonymous said...

I don’t have strong feelings about the CAP. It is a European problem. Farm Subsidizes, however, are a global problem and have long been a bone of contention between the U.S. and Europe, or more precisely, the U.S. and France. I remember 15 years ago a Frenchman sneering at me “C’est vous qui pousse le GATT.”

Bell Curve’s synopsis of what our European guest wrote, is accurate. The only think I might add is her admitting that the CAP was incoherent in many ways because it encouraged production of agricultural goods while fixing quotas and removing land from cultivation. She seems to imply that since reforms, this situation has improved.

She also implies something even more interesting to me. She says that the idea behind the current CAP is to allow farmers to remain competitive while imposing prices controls above global market prices. Then she points out, and this is interesting to me as a French wine buff (I will explain later), that the idea is to position European goods in the high quality end of the market. So they justify the increased prices by encouraging organic farming. Basically, what she is saying is that Europe has staked out a marketing position. I see this as a smart political move because it puts Europe in direct opposition to the U.S. market position as a large, industrial producer who uses genetic engineering practices. In effect, it tells the world that they have a choice- the large fake food produced by Americans or the wholesome, healthy food produced by us.

Her personal opinion is that the British exemption is not tenable because new members entering the market will need to be allocated CAP funds and the idea that a nation is part of a community, but exempt from paying into it counter to the very notion of solidarity or community. The Brits, and she doesn’t say this, but you can see it in her thinking, benefit from the agricultural goods of others, and thus should pay for them. And should you sit around deciding who benefits from what and therefore who should pay? This isn’t how you run a community. She ends with a little joke saying that basically, if you want to make Blair’s hair stand on end, all you have to do is say “European social model”

I mentioned French wine earlier. A friend sent me an article by an American commentator who suggested that the French should take all their excess grape juice, and rather than turning it into industrial alcohol, sell it as cheap wine on the global market. My friend was interested in my take on that. I pointed out to him that there is a global wine glut, so the French dumping more cheap juice into the mix wouldn’t help the overall price for wines. More than that, the French wanted to maintain their reputation as the makers of high quality wines. And you can’t do that if you sell swill. It dilutes your market position and forces you to lower the prices on your finer wines.

In her post, our guest mentions that agriculture is part of the European (maybe she meant French) identity, this it needed to be preserved as such. Well, that is what wine is for the French and why they take is rather seriously. Actually, most French don’t know the first thing about wine itself, but they know they are known for it and they don’t want their self image destroyed by poor quality product. And this is how they will market all their products- from tomatoes to foie gras. What this mean for the CAP, time will only tell.

// posted by USWest

Anonymous said...

Hvis man absolut skal skrive paa fremed sprog, skulle man vaere saa venlige at oversaet den ogsaa.

Translation: If one absolutely must write in a foreign language, one should be so kind as to translate it as well. Because the original posting was in French I may miss important aspects of the argument.

Now, re the CAP and agricultural subsidies: I'm not just in favor of scrapping the CAP. I'm in favor of scrapping all agricultural subsidies everywhere - world wide! The United States is a major sinner in this regard. As is Australia and most industrialized countries. The U.K. is the exception and for that reason I believe they are 100% entitled to their "rebate." What's more, the Dutch should get a rebate too!

As for the supposed reforms. Tinkering around with the details does not change the fact that hundreds of millions of Europeans are being robbed to subsidize the inflated economics of a few (not just French but mostly French) farmers.

The usual argument in favor of keeping agricultural subisidies is that having a domestic food supply is a vital security issue...There are three major flaws with this reasoning with regard to the EU.

First, this argument was made in the UK in the 1840s when they eliminated the infamous "Corn Laws." Agricultural elites insisted that Britain would be vulnerable to starvation in the next war they faught. After elimination of the "Corn Laws," Britain faught 3 wars against major European powers: The Crimean War against Russia, World War I against Germany and World War II against Germany. In the later two, the German navy attempted to besiege Britain in an effort to cut off the food supply. In neither case did this result in anything other than rationing. In both cases, Britain eventually won the war because of its industrial capacity (industrial capacity greatly improved because of the elimination of ag subsidies).

Second, the EU is so big that it is nearly impossible to besiege and cut off from imported food stuffs. There are tens of thousands of miles of coast line, not to mention thousands of miles of land borders.

Third, eliminating the CAP would not eliminate EU agricultural production. It would eliminate over priced, inefficient FRENCH ag production. But Polish, Hungarian and other new member states' agricultural sectors would continue to thrive!

Even if the CAP were "reformed" it would still represent a massive transfer of wealth from the urban majority in the EU to the rural minority with a disproportionate share of that transfer going to pampered, French farmers who depend entirely on the subsidy for their economic welfare.

The French should not fear the Polish Plumber. But the arrogant and grasping French agricultural intersts should fear his country cousin, the Polish Farmer.

Now, as for the argument that the CAP is justified because it enables European (mainly French) farmers to establish themselves in a niche market of high quality products: This is a misunderstanding of what a market is. If the high end, organic etc, products truely have found a niche in the world ag market, then no subsidy would be needed at all! The market would set a price and if it were really a desired product, state subsidy would not be required.

So what is the real reason French people who aren't farmers like the CAP? I suggest it is because the CAP allows the French government to transfer to the costs of its out dated and inefficient agricultural subsidy system to more industrialized countries like the Germans, Dutch and British. The British wouldn't pay for French largess and so they got their rebate. The Germans are gradually realizing that with Poland in the EU now, they don't need to continue spoiling the French ag sector with free cash.

Eliminate the CAP! The could free up no less than 40% of its budget for use on other more worth while things like rural economic development (invest in the rural areas in ways that do more than just inflate standards of living for the short term), structural fund projects for areas of high unemployment, improved infra structure for new member states etc. 

// posted by Raised By Republicans

Paul Adams said...

Hi Friend! You have a great blog over here!
Please accept my compliments and wishes for your happiness and success!
If you have a moment, please take a look at my cheap hosting free domain site.
Have a great day!