Thursday, 1 December 2011

Follow the Money Part 3

There's a clear linkage (better understood in Europe where many starved during the Second World War) between national sovereignty and food production. It's one reason governments everywhere have a hand in the business of agriculture. In most developed countries (Europe for the reason stated above, and the United States for other reasons -put Earl Butz in the search engine below), there are huge transfers of public funds to promote production of certain commodities, and most often benefit the big and already rich (whether they fall into the 1% I'm not sure, but they're up there).

Canada does have "risk management" programs like crop insurance, and disaster relief, but also has something else that's under ferocious attack at the moment: supply management. Anyone who reads the blog knows I do support supply management with all of its flaws (the high price of quota being the worst). One of the reasons I like it is that farmers get a much fairer share of the consumer dollar, and that consumer dollar is the only source of revenue for dairy, poultry and egg producers, there's no other taxpayer contribution coming from government like there is for corn, feedgrains, sugar, etc in the U.S., and as we'll see in Europe.

For understandable reasons Canada wants a seat the what's called the Trans-Pacific Partnership trade talks, and for the first time ever a Canadian Prime Minister has indicated a willingness to alter/abandon supply management to get it. National business columnists sound like Mr. Spock in a Star Trek episode, that the interests of the few (12 thousand farmers) must be sacrificed for the interests of the many (the rest of us). 

Two recent items to consider: one a very convincing defense of supply management by the current president of the PEI Federation of Agriculture, and the second a blistering piece about how perverse agricultural subsidies can be.  There are a lot of reasons for Canadians to take a breath, and think about which system works better.

Don't sacrifice a system that works

By Bertha Campbell
Over the past few weeks I have been astounded to hear that supply management will be ‘on the table' in Canada's upcoming trade negotiations. I can't help thinking that our prime minister is being reckless with Canadian agriculture, with the livelihoods of Canadian farm families, but most of all, he is tampering with a decades-old system which I believe is a model for sustainability.
We are at a time in history when we are realizing that in order for life to be sustainable on this planet, we must use less, waste less, pollute less, consume less, etc. We are all being encouraged to do things that are not just economically sustainable but also environmentally and socially sustainable as well. This is known as ‘the triple bottom line'.
Our 40-year-old supply management system for dairy, egg and poultry farm products is a system that I believe does take into account ‘the triple bottom line'. The following bullets help to demonstrate that supply management in its design has many attributes that improve our environmental, economic and social sustainability.
• The principle of supply management is that we focus on our own domestic market, and that supply is matched to demand. We don't overproduce causing waste in society, as is the case in some countries that have subsidies and other schemes that lead to overproduction.
• We stay within our borders and don't dump oversupply into other countries, including developing nations, causing them economic woes by distorting their markets.
• -We don't transport our products half-way around the world, thus acknowledging that ‘how food is shipped and handled' can be as important from a sustainability point of view, as how it is produced.
• Many of our dairy-processing businesses in the Atlantic region are structured as co-operatives, and co-operatives have an inherent set of values that guide them to consider people and environment (workers, members, communities) as well as the economic bottom line.
• Society has the secure knowledge that our dairy and poultry products are safe, because they were produced in our own backyard by Canadian farmers under stringent regulations.
• Supply management ensures that our Canadian farmers will get a fair return for their labours because the price they receive is established according to a cost of production formula. This helps to ensure stability on the farm, and thus sustainability of our country's food supply. It also means that farmers are able to achieve their returns from the marketplace, not from taxpayers' dollars.
• The cost of production formula also ensures that consumers never pay more than the documented cost of production, allowing predictability and fairness in pricing for the shopping public.
Remembering that natural resources are not limitless, we must consciously choose to do things that help to minimize the impact we have on our world. As shown above, supply management seems to be a good fit for living more sustainably. It is a system more focused on conservation, self-reliance and food security, and less inclined towards unlimited growth and over consumption.
If you agree, let's be sure to let our politicians know that we believe supply management makes our country ‘greener'. Our federal politicians need not succumb to pressure from other world powers; those countries may simply be ‘green' with envy.
Bertha Campbell is president of the P.E.I. Federation of Agriculture. 

Big Farmer
Nov. 28, 2011

The poorest taxpayers are subsidising the richest people in Europe: and this spending will remain uncut until at least 2020.

By George Monbiot. Published in the Guardian 29th November 2011

What would you do with £245? Would you a. use it to buy food for the next five weeks?, b. put it towards a family holiday?, c. use it to double your annual savings?, or d. give it to the Duke of Westminster?

Let me make the case for option d. This year he was plunged into relative poverty. Relative, that is, to the three parvenus who have displaced him from the top of the UK rich list(1). (Admittedly he’s not so badly off in absolute terms: the value of his properties rose last year, to £7bn). He’s the highest ranked of the British-born people on the list, and we surely have a patriotic duty to keep him there. And he’s a splendid example of British enterprise, being enterprising enough to have inherited his land and income from his father.

Well there must be a reason, mustn’t there? Why else would households be paying this money – equivalent to five weeks’ average spending on food and almost their average annual savings (£296)(2) – to some of the richest men and women in the UK? Why else would this 21st Century tithe, this back-to-front Robin Hood tax, be levied?

I’m talking about the payments we make to Big Farmer through the Common Agricultural Policy. They swallow €55bn (£47bn) a year, or 43% of the European budget(3). Despite the spending crisis raging through Europe, the policy remains intact. Worse, governments intend to sustain this level of spending throughout the next budget period, from 2014-2020(4).

Of all perverse public spending in the rich nations, farm subsidies must be among the most regressive. In the European Union you are paid according to the size of your lands: the greater the area, the more you get. Except in Spain, nowhere is the subsidy system more injust than in the United Kingdom. According to Kevin Cahill, author of Who Owns Britain, 69% of the land here is owned by 0.6% of the population(5). It is this group which takes the major pay-outs. The entire budget, according to the government’s database, is shared between just 16,000 people or businesses(6). Let me give you some examples, beginning with a few old friends.

As chairman of Northern Rock, Matt Ridley oversaw the first run on a British bank since 1878, and helped precipitate the economic crisis which has impoverished so many. This champion of free market economics and his family received £205,000 from the taxpayer last year for owning their appropriately-named Blagdon Estate(7). That falls a little shy of the public beneficence extended to Prince Bandar, the Saudi Arabian fixer at the centre of the Al-Yamamah corruption scandal. In 2007 the Guardian discovered that he had received a payment of up to £1bn from the weapons manufacturer BAE(8). He used his hard-earned wealth to buy the Glympton Estate in Oxfordshire(9). For this public service we pay him £270,000 a year(10). Much obliged to you guv’nor, I’m sure.

But it’s the true captains of British enterprise – the aristocrats and the utility companies, equally deserving of their good fortune – who really clean up. The Duke of Devonshire gets £390,000(11), the Duke of Buucleuch £405,000(12), the Earl of Plymouth £560,000(13), the Earl of Moray £770,000(14), the Duke of Westminster £820,000(15). The Vestey family takes £1.2m(16). You’ll be pleased to hear that the previous owner of their Thurlow estate, Edmund Vestey, who died in 2008, managed his tax affairs so efficiently that in one year his businesses paid just £10. Asked to comment on his contribution to the public good, he explained, “we’re all tax dodgers, aren’t we?”(17).

British households, who try so hard to keep the water companies in the style to which they’re accustomed, have been blessed with another means of supporting this deserving cause. Yorkshire water takes £290,000 in farm subsidies, Welsh Water £330,000, Severn Trent, £650,000, United Utilities, £1.3m. Serco, one of the largest recipients of another form of corporate welfare – the private finance initiative – gets a further £2m for owning farmland(18).

Among the top blaggers are some voluntary bodies. The RSPB gets £4.8m, the National Trust £8m, the various wildlife trusts a total of £8.5m(19). I don’t have a problem with these bodies receiving public money. I do have a problem with their receipt of public money through a channel as undemocratic and unaccountable as this. I have an even bigger problem with their use of money with these strings attached. For the past year, while researching my book about rewilding, I’ve been puzzling over why these bodies fetishise degraded farmland ecosystems and are so reluctant to allow their estates to revert to nature. Now it seems obvious. To receive these subsidies, you must farm the land(20).

As for the biggest beneficiary, it is shrouded in mystery. It’s a company based in France called Syral UK Ltd. Its website describes it as a producer of industrial starch, alcohol and proteins, but says nothing about owning or farming any land(21). Yet it receives £18.7m from the taxpayer. It has not yet answered my questions about how this has happened, but my guess is that the money might take the form of export subsidies: the kind of payments which have done so much to damage the livelihoods of poor farmers in the developing world.

In one respect the government of this country has got it right. It has lobbied the European Commission, so far unsuccessfully, for “a very substantial cut to the CAP budget”(22). But hold the enthusiasm. It has also demanded that the EC drop the only sensible proposal in the draft now being negotiated by member states: that there should be a limit to the amount that a landowner can receive(23). Our government warns that capping the payments “would impede consolidation” of landholdings(24). It seems that 0.6% of the population owning 69% of the land isn’t inequitable enough.

If subsidies have any remaining purpose it is surely to protect the smallest, most vulnerable farmers. The UK government’s proposals would ensure that the budget continues to be hogged by the biggest landlords. As for payments for protecting the environment, this looks to me like the option you’re left with when you refuse to regulate. The rest of us don’t get paid for not mugging old ladies. Why should farmers be paid for not trashing the biosphere? Why should they not be legally bound to protect it, as other businesses are?

In the midst of economic crisis, European governments intend to keep the ultra-rich in vintage port and racehorses at least until 2020. While inflicting the harshest of free market economics upon everyone else, they will oblige us to support a parasitic class of tax avoiders and hedgerow-grubbers, who engorge themselves on the benefactions of the poor. 

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