Wednesday, November 04, 2009

The Economics of the EU Madhouse

I don't know whether this is genuine or not, but it makes a point!

Dear Secretary of State

My friend, who is in farming at the moment, recently received a cheque for £3,000 from the Rural Payments Agency for not rearing pigs. I would now like to join the "not rearing pigs" business.

In your opinion, what is the best kind of farm not to rear pigs on, and which is the best breed of pigs not to rear? I want to be sure I approach this endeavour in keeping with all government policies, as dictated by the EU under the Common Agricultural Policy.

I would prefer not to rear bacon pigs, but if this is not the type you want not rearing, I will just as gladly not rear porkers. Are there any advantages in not rearing rare breeds such as Saddlebacks or Gloucester Old Spots, or are there too many people already not rearing these?

As I see it, the hardest part of this programme will be keeping an accurate record of how many pigs I haven't reared. Are there any Government or Local Authority courses on this?

My friend is very satisfied with this business. He has been rearing pigs for forty years or so, and the best he ever made on them was £1,422 in 1968. That is - until this year, when he received a cheque for not rearing any.

If I get £3,000 for not rearing 50 pigs, will I get £6,000 for not rearing 100?

I plan to operate on a small scale at first, holding myself down to about 4,000 pigs not raised, which will mean about £240,000 for the first year. As I become more expert in not rearing pigs, I plan to be more ambitious, perhaps increasing to, say, 40,000 pigs not reared in my second year, for which I should expect about £2.4 million from your department. Incidentally, I wonder if I would be eligible to receive tradable carbon credits for all these pigs not producing harmful and polluting methane gases?

Another point: These pigs that I plan not to rear will not eat 2,000 tonnes of cereals. I understand that you also pay farmers for not growing crops. Will I qualify for payments for not growing cereals to not feed the pigs I don't rear?

I am also considering the "not milking cows" business, so please send any information you have on that too. Please could you also include the current Defra advice on set aside fields? Can this be done on an e-commerce basis with virtual fields (of which I seem to have several thousand hectares)?

In view of the above you will realise that I will be totally unemployed, and will therefore qualify for unemployment benefits.

I shall of course be voting for your Party at the next general election.

Yours faithfully,

Strangely, I don't see the Lisbon Treaty addressing this issue - even though we are told it is designed to make Europe run more smoothly. It's only when this sort of thing is stopped and the monthly switch from Brussels to Strasburg is abandoned that I will be able to take EU institutions seriously.


davidc said...

leader of conservative party wimps out over eu ?

no surprises there !

Anthony Z said...

Here's the thing: I completely agree with you. The CAP needs serious top-to-bottom reform, and the Brussels-Strasbourg shuttle is a ludicrous waste of money. I want both those reforms to happen, soon.

That's why it amazes and infuriates me that rather than arguing for those excellent policy goals, the Conservative party are locking themselves away like sulky teenagers, insisting that the only thing that matters is that Europe should give our powers back and STAY OUT OF MY ROOM OR ELSE!

How can anything the Conservatives want to see happen in Europe be achieved without influence, and without a party that the other players in Europe see as a partner worth negotiating with?

Do the Conservatives feel that virtuous failure is better than a successful compromise? That's the politics of opposition, not of Government.

Demetrius said...

You have missed a trick there. Is there an EU grant for not blogging? Think of all the angst and worry it would save amongst hard pressed ministers and officials.

Marc Stoneham said...

If you read Catch-22 you'll find a remarkably similar piece about not growing alfalfa :)

TonyHendo said...

I play Farmville,,
an online virtual farming game!
I have various crops and animals. If I stop "farming" all of these can I apply for a HUGE handout from the government?
Pity there isn't a bankville game. We could all end up owning banks.....oh just a minute that's what has happened in the real world expect we are being fleeced, as it where, for the privilege.

Sean Haffey said...

Mmmmm. Funny! Source?

John said...

It's only when this sort of thing is stopped and the monthly switch from Brussels to Strasburg is abandoned that I will be able to take EU institutions seriously.

This sort of thing is made up rubbish, so stopping that won't be a problem.

With regard to the second point, stopping the parliament meeting in Strasbourg requires an EU treaty change. Each member state has a veto over that and the French won't agree to that strangely enough. Such are the problems of the national vetoes.

Twig said...

Danish bacon is awful.
Why don't we pull out of the EU and start producing our own food, and get our fishing fleets working again?

dizzy said...

Think Guido posted that a while back too. Quite funny.

sky said...

It's very ancient - I've saw a variant on this many years ago. I have a feeling it originated in a newspaper column somewhere....

Richard Laming said...

The commitment to shuttle between Brussels and Strasbourg is written into the EU treaties. It would require unanimity amongst the member states to change it, but the French won't play ball. If decisions like this could be taken by majority vote, then the waste of Strasbourg would be dropped very quickly. Iain: can we count on you as a supporter of more majority voting in the EU?

norfolkandchance said...

I too enjoyed that when I first saw it over a year ago.

DespairingLiberal said...

It's an urban legend but don't let me spoil your anti-EU headbanging with mere facts.

Since you state in the article at the top that you don't know if it's genuine or not, why repeat it? What "point" does it make exactly, since it's untrue?

Jack said...

It's a funny letter but the reality is that this subsidy was dreamed up by MAFF/DEFRA and the UK pig farmers, and wasn't something that came from Brussels, although the Commissionn did have to give its approval for a 'state aid'.

Faced with overproduction and falling prices, UK pig farmers persuaded the Government to introduce a 'Pig Industry Restructuring Scheme' that would take out production by paying some existing pig farmers to stop farming pigs. The logic was that if some farmers stopped, production would fall and prices would go up again, allowing those pig farmers who remained to be profitable.

In most other parts of the economy over-supply of a market results in a price fall and a downward adjustment in supply, and perhaps an increase in consumption.

But farming, where politics usually trumps economics and over-supply and price falls means farmers go and blockade the streets and politicians quickly roll over and agree to bail them out.

It's probably a massive waste of money but it's a UK policy not an EU one. There's an independent evaluation of it here for anyone interested.

It should be stressed that MPs from all sides of the House welcomed the scheme, particularly those with lots of pig farmers among their constituents.

The Scheme closed a long time ago but we are witnessing a similar situation in the dairy sector, where a fall in global demand for milk products means prices are down from their peaks a couple of years ago and many farmers are making losses.

The question is, what should the state do when market prices fall below the costs of production for a large number (though by no means all) of producers. Maybe you'd like to address this substantive issue rather than presenting inaccurate Euromyths.

Lazy Student said...

I worked at the RPA for three months on my gap year. Ludicrous situations like this are just one tiny part of the problem.

Sobers said...

Ironically pig farming is unsubsidised by the EU. While there may have been a scheme to encourage people to stop pig farming (much as there was a scheme back in the 1980s to encourage dairy farmers to give up milk production) pig farmers are probably the least subsidised type of farming.

It is an industry that suffers massive swings in profitablity as it is easy to both stop and start production, and is very vulnerable to rising grain prices, which was the case 2 years ago when grain prices doubled in 6 months. Many pig farmers stopped production then.

To all those who think removing subsidies on farming would reduce prices in the shops, I'm afraid you are sadly mistaken. If subsidies were removed, a large proportion of UK farmers would go out of business, reducing the amount of food produced within a year or 2. Prices would rise (less production, same demand = higher prices).

You also have to factor in the supermarkets stranglehold on food retailing. I notice that whenever food commodity prices (such a bulk grain or milk prices) rise, shop prices rise very quickly. But when bulk prices fall the prices in the shops fall much more slowly, if at all. Has bread fallen by half in price over the last year? Certainly not. But that's the cut in bulk grain prices over the same period.

Graham said...

Yes Guido did post this a while ago

Letter to Miliband.

Axel said...

I fully endorse the remarks by Jack and Sobers!

The "letter" is trying desperately hard to be funny but is just typical of the anti EU agenda so prevalent in the UK today!

When will the UK wake up to the fact that their days of glorious empire and world power are gone? They should turn their attention to engaging in Europe where they could make a positive contribution and even even help to undo some of the needless bureaucracy that they so love to hate.

But no, it's much more fun to use Brussels as the whipping boy for all the problems at home.

Having lived in Germany since the 70s I really appreciate the free movement of goods, services and people and the spread of the rule of law and democracy to the former Soviet occupied states in Eastern Europe.