In his column Hayes in the House John describes the EU common Agricultural Policy as crazy.
In the UK agriculture generates 1 per cent of the UK’s national Income (GDP) and employs 1 per cent of the UK labour force. The ratio between the productive arable farm land and population is the fourth lowest in the EU post 1945 neither the UK or Europe could feed itself. It become imperative to boost agricultural output and productivity in the UK and Europe.
Post 1956 the Common Market Agriculture Policy (CAP) was focused on increasing self sufficiency in food supplies and to support rural incomes. Firstly by imposing a tariff on more efficient low cost overseas producers in North America, South America and Australasia and secondly by fixing the price for European produced foods above global market prices. The policy worked. Agricultural output and productivity rose, rural incomes rose. The policy makers were aware that price controls particularly on agricultural output destabilises the markets creating an oversupply of agricultural products impossible to sell without incurring a loss. Free distribution to the third world destabilised their domestic production and alternative uses for or storage of surplus food was expensive.
The UK adopted a more flexible support system which favoured the Commonwealth but exposed UK producers to the vagaries of global market prices. The UK system was less effective in protecting rural incomes or increasing agricultural output and productivity compared to the EU. After the UK joined the Common Market ‘the expense and problems of oversupply became unsustainable. The stumbling block to reform was ‘avantage acqui’. Once a benefit is received recipients are reluctant to surrender it.
CAP was eventually reformed. The external tariff was retained but farm businesses received a subsidy not to produced protected foodstuff by leaving the land fallow or producing an alternative non food product bio-fuels? This policy has worked. The mountains and lakes of surplus foodstuffs disappeared but the problems of low rural income has not. The accession of the poorer less industrialised economies of eastern and Mediterranean Europe into the EU has exaggerated this problem
Across Europe small scale farm businesses, farming less fertile soil on land where the terrain inhibits mechanisation, under capitalised with low returns on the capital, unable to invest in high yielding crops or improved animal husbandry, unable to invest in bigger efficient machinery or fertilisers or improved marketing, earning poverty wages for working long hours of unrelenting physically demanding labour in all weathers, is the lot of the small farmer and the majority British of farming businesses (hill farmers, dairy farmers, small mixed farms). Outside the EU and without the protection of the common external tariff their already bleak future will get even worse (the external tariff on hard Cheddar type cheese is 52.5 per cent but you can buy competitively priced Canadian Cheddar in British supermarkets).
It is no surprise that France receives three times more from the CAP than the UK because they have three times more arable land and employ three per cent of their work force in agriculture
Grubbing up hedges, piping ditches to create large fields dominated by monoculture cropping which destroy the ‘natural ‘ habitats of native fauna and flora to accommodate ever larger more efficient farm machinery, can be regulated by defining hedges and limiting the size of farm gates
In 1974 the UK remained a major importer of food. The burden of the EU budget funded in part from the receipts from the common external tariff and a small levy on VAT fell disproportionately on the UK Maggie Thatcher secured a deal with the EU that gives UK a permanent rebate on the UK’s contributions to the EU budget worth £4.8bn (2015). Part of this rebate is in lieu of not paying more into the CAP budget.
A reasoned rational debate will not be possible while the Remain or Leave protagonists are guilty of being economical with the actualite or lavish with unsupportable aspirations to recapture past glories.