As the saying warns, those who do not learn from the past are condemned to relive it – but sometimes, reliving the past is worth considering at least. 🙂 After all, it was in the past that we were not in the EU. How did we survive in that dim and distant time?
When Britain joined the EU (it was called the EEC in those days), many people – on both sides of the channel – pointed out that the UK’s prior method of supporting a viable farming sector had some things going for it.
– The EEC set minimum prices for agricultural products – so had butter mountains, wine lakes, etc. (Basic economics: want a surplus? – set a minimum price; want a shortage? – set a maximum price.) Food cost more, which was bad news for the poor inside the EU, and EU protectionism was especially focussed on agriculture, which was bad news for the poor in the third world. (When the UK industrialised, it let its farming sector shrink as Europe sold it food in exchange for high-tech products. Thanks to the EU, Europe’s approach to the rest of the world is the opposite.)
– The old UK system of “deficiency payments” for farmers was a negative sales tax. UK farmers sold what they could in competition with imports, and, instead of paying sales tax on it received a ‘deficiency payment’ – an annually-set sum per unit sale for farm products in the scheme. Thus food was cheap to the consumer, and a lot of it was imported, but UK farmers could budget each year to compete with third-world farmers without having to adopt a third-world living standard.
I’m not a fan of state intervention. However even Milton Friedman says that keeping enough of a local farming sector to survive e.g. another WWII can (sometimes) be a valid exception. If today’s politics tells us that Brexit’s effect on farmers will be addressed somehow then I’m prepared to discuss how best to do what will anyway be done. Joining the EU raised food prices. Why shouldn’t leaving it lower them? If the government will spend money on it anyway, then what do people think of motivating farmers to produce for the market instead of for the surplus, while helping the UK poor by lowering food prices instead of giving them yet another state handout, and allowing the poor in the third world to sell us what they can produce instead of tariffing them? It’s what we did before.
We given we are living the EU cause it’s shit, why repeat its mistakes.
Let’s retry our own system if we can’t New Zealand our way to no subsidy….
This CapX article explains the evil of the EU system and also makes the case (that New Zealand illustrates) for just ending the subsidies.
Were that abrupt total ending politically infeasible right away, then at least the evils of high food prices at home and harm to the third world abroad can be eliminated.
Having said that, as an transition to the zero subsidy New Zealand-style regime, why not revert to the mechanism we used before we joined the EEC in 1973?
Resurrect it with a sunset clause on the bill and gradual taper of the subsidy (if that’s at all possible) and Bob’s your uncle.