A mad, money-eating monster

Press, 12 February 1986, Page 20

A mad, money-eating monster

GODFREY BROWN, of the “Daily Telegraph,” London, reviews some of the absurdities of C.A.P. — the common agricultural policy of the European Economic Community.

Over-all farming income in Britain has plunged by 43 per cent. Yet public spending on British agriculture — now up to SNZ6 billion — is almost exactly twice what the farmers get as income.

under the C.A.P. and on national grants and subsidies has increased by SNZISOO million to 5NZ6635 million in 1985-86. Farming income dropped by 5NZ2637 million to 5NZ3362 million in 1985.

The two figures seem to suggest that something is seriously amiss in the workings of the Common Agricultural Policy which is supposed to protect and support the farmer. But this, indeed, is the picture of British agriculture that emerges from the annual review White Paper, published by the Government last month. It shows that public spending

True, the two figures are not strictly comparable, but they do make the point rather dramatically, and Ministry of Agriculture experts admit it is the first time they can remember that support spending has exceeded incomes. Public spending averages more .than 5NZ27.000 for each of the 240,300 farm holdings in the United Kingdom. That is a figure guaranteed to cause snorts of

outraged disbelief by farmers who are inclined to ask where are their cheques. But much of the money goes on buying up and storing surplus farm produce, for which no commercial market exists.

With remarkable timing, the Government’s public spending plans, published the day after the agriculture review allocated, an extra SNZI77O million over the next two years, mainly to swell the beef and grain mountains. The Common Agricultural Policy is probably the main single reason why a majority of the British public consider our Common Market membership to be a bad thing for the country, as evidenced by a recent poll carried out for the Brussels Commission. Having been closely involved with the C.A.P. as an observer both before and after we joined the Community 13 years ago, I sometimes feel in my more cynical moments that the C.A.P. is the main reason the Community has not gone on to develop common policies in other major economic spheres. For, having seen what they spawned with the C.A.P., the policy-makers have drawn back from creating another moneydevouring Frankenstein monster.

weather, it can hardly be what the architects of the C.A.P. intended. Had the weather been better, and crops bigger, farming income would have been higher — but so too, in all probability, would the public spending bill. Nor is the drop in farming income confined to Britain: Commission figures show it is widespread throughout the Community.

At the Ministry of Agriculture, senior officials privately (and truthfully) admit that they could think of far better ways of spending SNZ6 billion on agriculture, were they not bound by the rules of the C.A.P. which require very large sums to be laid out principally on market intervention.

Unfortunately, experience suggests reform will be late, if at all. Even the much-vaunted (and, at the time, much-criticised) milk quotas still left dairy production in the E.E.C. massively in excess of commercial market demand. Hence the butter mountain, still obstinately around the million-tonne mark, and hence the Brussels Commission’s latest plan to buy up and cancel quotas covering a further three million tonnes of the E.E.C.’s 13 million tonnes milk surplus. But at least the quotas brought the continuing growth of the dairy surpluses to a halt. Now the Commission is planning to achieve the same goal with the cereal surpluses, though by different means.

It is a considerable feat simultaneously to boost public spending substantially to massive levels, while the people the spending is intended to benefit suffer a severe income drop, while their numbers continue to fall and while the food mountains continue to rise.

Even if much of the reduced farm income in Britain can be attributed to last year’s appalling

The ingrained habits of the Common Market Farm Ministers are a major obstacle to reform. They spend weeks or even

months each year arguing about percentage changes in support prices for individual commodities on an annual basis, rather than taking a much longer-term view of what European agricultural policy -, objectives should now be, and' how to set about realising theni. - ■ -

The result is that farmers have no appreciation that.-the Community has any sort of mediumterm agricultural strategy it' intends to follow and little incentive to alter their farming patterns. '

The concept of value .for money in the cost of farm spending also appears totally alien both to the C.A.P. and to the Ministers’ thinking. As a. first step, strict limits should be placed on the amount of farm produce that qualifies for the full guaranteed price, as is already done in some commodities.

Public spending on agriculture should also be used to increase quality, rather than simply quantity. And it is about time more of the money was spent encouraging the production of crops in severe and continuing shortage, of which timber is the prime example. There are so many examples of C.A.P. insanity. Expensive j energy is used to dry into powder surplus skimmed milk left over from making surplus butter, then we subsidise the sale of the skimmed milk powder to other E.E.C. farmers to feed back to their livestock — after adding the water removed in the earlier costly process. We are all — farmers, consumers and taxpayers — getting the worst of all worlds.