What are farmers for?

Now in the olden days it was obvious. They, for their own benefit farmed. They raised crops and livestock, and having consumed that which they wished to consume took ther surplus to market. There they exchanged their surplus at a price agreed between them and either a consumer  or a trader.

One of the unexpected and pleasant by products of this behaviour was that it was found that production of surplus aoften went along with good husbandary of the land, and of the livestock. Thus Adam Smith's invisible hand beautufied this land of ours.

This over the centuries has produced the landscape we so love, even if these days we generaly only see it from the steamed up windows of our cars or public transport.

So I ask again what agriculture is for, because after the latest attempt to suggest a possible maybe in twenty years perhaps reform pof the Common Agricultural policy announced yesterday I find I was wrong. Agriculture is now, too look at the three suggested option about something else.

Option 1

Maintain the Health Check orientation of increasing funding for meeting the challenges related to climate change, water, biodiversity and renewable energy, and innovation.

or

Option 2
Adjust and complement existing instruments to be better aligned with EU priorities, with support focused on environment, climate change and/or restructuring and innovation, and to enhance regional/local initiatives.
Strengthen existing risk management tools and introduce an optional WTO green box compatible income stabilization tool to compensate for substantial income losses.
Some redistribution of funds between Member States based on objective criteria could be envisaged.

or indeed

Option 3

The measures would be mainly focused on climate change and environment aspects

They seem to have their carts before their horses, which if they had ever visited a farm they might have been able to understand.

Thetre is other, perhaps more reasoned commentary here, and here, where the CAP  blog picks up the NFU's response

Addicts say: "We want more drugs"

The BBC has a rather extraordinary piece up on its website,

Farmers defend controversial EU subsidies

Well, errr of course they do.

It is about as controversial as say, 'Navy wants more ships', or maybe 'Dogs reported to be quite keen on bones'.

That is neither here nor there. What we have here is a couple of carefuly selected farnmers from France and the UK who have shown great entrepreneurial spirit, and asked them if they like to receive CAP money. They are paragon's in their fileds. So one canot criticise them individually, that would be mean after all. But they are entirely unrepresentative of the general situation within the farming industry.

Having subsidies set at betwen 40-60% of their annual income means that they are not ndependent dfarnmers, merely part of the last great nationalised industry, with all the problems that being directed from above entails.

The French farmer points to the problem,

He is paid according to the size of his farm - which is monitored by satellite - and the way in which he farms.

Under EU rules, he cannot turn to the cheap fertilisers or pesticides they might use in Latin America. His fields are surrounded by streams, grass borders and woodlands which he is paid to protect.

He cannot act in a way that woyuld maximise income because of various rules and regulations that impede his actions. He is paid as a custodian, not as a farmer. Fine if you want it that way, but is that what the vast sum of money handedc over by the taxpayers is for? The CAP and the rukles that surround it are bad for farming. But it would take a very brave farmer who revbels against it. They know that ist hampers their actions, they know that it has turned them into subsidy junkies and they know that in the ened it is bad for them and for the continuation of food production in the European countryside, but they would be mad to turn down such a massive slice of their income.

How worrying this all is is made clearly apparent by the caveat on the comment section,

Are you in the EU? What do you think of the EU's system of farm subsidies? What do you think of the points made by the farmers in this story? You can send us your views using the form below.
At no time should you endanger yourself or others, take any unnecessary risks or infringe any laws.

Cereal Killer : China's inverse Corn Law

This evening the FT has flagged up a story that I hope gets the prominance that it deserves, but some how I doubt it.

China will tax grain exporters
China is to introduce taxes on grain exports in the latest attempt to rein in food-driven inflation that reached an 11-year high in November.

Exporters of 57 types of grain, including wheat, rice, corn and soya beans, will have to pay temporary taxes of between 5 and 25 per cent, the country’s Ministry of Finance said on Sunday.

Now I don't want to panic anybody but that is quite an extraordinary act. Think about it for a moment, we in the European Union are currently subsidising the Common Agricultural Policy to the tune of dozens of billions a year, meanwhile China is introducing export taxes on grain... of up to 25%. Now the Chinese don't do things by accident, and I suspect that though they claim this move to be temporary, so was the income tax, in 1799.

With grain prices in the UK doubling in the last 12 months, and their being a global shortage of food, expect that food inflation over the next year to leap. Of course this won't just affect the price of bread and risotto. The largest cost in chicken, pig and cattle is fodder. Beer will go up even more.

As the Telegraph points out today,

This will be a global trend... but higher food costs too. In 2007, wheat prices doubled - with the price of other crops like cocoa and coffee also jumping.

Next year, the growing - and increasingly wealthy populations of the developing world will keep global food demand rising. Global supplies - hit by more droughts, floods and the increased use of land for bio-fuel production - will struggle to keep up.

That's why, in 2008, high food prices will replace expensive oil as the bogeyman of Western consumers and central bankers. Because food accounts for a large portion of disposable incomes, escalating food prices will seriously dent consumer confidence next year, while preventing deep base rate cuts.

What does the the EU do? As Chris Booker states today, many of these problems are either caused or exacerbated by the European Union; a schlorotic conception which has an elderly system designed to deal with the like of Pharoh's dream of seven fat years, but utterly unprepared for his nightmare of seven years of fallow.

People often tell me that the European Union is irrelevant to their lives. If t is in part responsible for a doubling of basic fod prices and the consumer crisis that this will bring about then maybe, just maybe peoiple might begin to notice how big an issue it is.

Imagine a single mother living on an estate on benefits. With just one child she is spending upwards of 30% of her weekly income on food. If that price doubles in the next twelve month what on earth will she do? Is the country at all prepared for the hike in taxes required to deal with this situation. All those on low incomes, pensioners, the unemployed, school leavers, the disbled, imigrants, those living on the minimum wage.

The thought is terrifying. Funily enough Gordo failed to mention this in his New Year message.

Odd that.