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Creating an Agricultural bubble the EU way & pissing away millions

Tom Winnifrith
Sunday 3 February 2013

Two years ago the EU ceased to subsidise tobacco growers in Greece, Poland and Bulgaria – folks who received £260 million a year as recently as three years ago. The problem is that their tobacco is a) not very good and b) costs far more to produce than tobacco from the third world so they need subsidies to stay in business. Now the EU wishes to restart subsidies. This is patent nonsense on three levels.

1. This is the same EU that is spending £27 million a yet trying to stop folks smoking. It claims that its campaigns are helping hundreds of thousands of people quit the habit. That is 100% unprovable and I would argue that this money is also being pissed away. But if they want to stamp out the habit why subsidise producers?

2. Subsidising high cost farmers (of anything) in Europe merely makes life tougher for low cost farmers in places like Africa. They are thus less able to export cash crops. Which means they are poorer so demand more aid (most of which their leaders steal). Which body is the biggest donor of aid? Er…the EU. Go figure.

3. The farmers milking the subsidies in Greece, Poland and Bulgaria could farm something else. If that meant that there were more carrots or broad beans produces that would mean cheaper food costs for European consumers. Which is probably not a bad thing.

And so here we have a proposal that the Evil Empire spends money on something that will make folks in Africa poorer, consumers in Europe poorer and clearly has a negative health impact for all concerned. And the UK will be chipping in 12% of the cost of the scheme.

The EU will also have created an agri-bubble. No-one actually wants or needs low grade Greek tobacco and the industry is only viable with subsidy. But if the taxpayers of the EU write a blank cheque folks will be produced into producing more and more of something no-one actually needs or wants. This is capital and land misallocation – a bubble EU style. And you pay…

Is this the sort of thing Call Me Dave reckons he can get the UK out of before his 2018 referendum? Like hell he can.

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About Tom Winnifrith
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Tom Winnifrith is the editor of TomWinnifrith.com. When he is not harvesting olives in Greece, he is (planning to) raise goats in Wales.
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