Does anyone else think it's an absolute disgrace that food production is limited...

hatrickpatrick

...by the EU quotas when we have spiralling inflation and serious shortages of money in the eurozone? I mean this whole thing about the milk quota for example - surely people should just produce as much as they possibly can so there can be as much of it on the market as possible? controlling production like this is the most anti competitive thing I can think of, it literally forces inflation up and up and up...

mike65

We used to have milk lakes.

Over production is still happening but handily there is an export market right now

http://www.advertiser.ie/kilkenny/article/3644

recent article

http://www.independent.ie/farming/news-features/new-milk-strategy-required-fischler-1532692.html

Mike

JoeTheDumber

hatrickpatrick wrote: »

...by the EU quotas when we have spiralling inflation and serious shortages of money in the eurozone? I mean this whole thing about the milk quota for example - surely people should just produce as much as they possibly can so there can be as much of it on the market as possible? controlling production like this is the most anti competitive thing I can think of, it literally forces inflation up and up and up...

Welcome to the NWO. The EU have been dumping food in the channel for 40 years, and here the dumbos are "saving Africa".

You are forgetting that half the farmers in Europe are paid to produce nothing.

seamus

The primary problem here is that the CAP is an anachronism. It's a relic of the post-war Europe. But it's been in place for so long, that suddenly pulling the rug out from underneath the farmers could further destabilise economies.

If you take a very base look at it;

1. You stop subsidising farmers and controlling prices on everyday things like milk and grain and let free market economics in.
2. EU markets are awash with these staples, both from local and EU sources.
3. Their prices crash.
4. All but the largest farmers, unable to make a living on worthless foods, go out of business.
5. Production stabilises, prices rise again, controlled by a small handful of very large companies.

Sounds rosy enough, eventually. But what happens at stages 3 and 4? Is that good for the country, or does our own economy freak out? There's a good deal of stock market money tied up in these commodities, so if the value of the actual produce was to crash, the stock markets could go with it.

This is seems to be the point of quotas - encouraging countries and farmers to only produce as much as they actually need, so that when the controls on price are lifted, we don't have a ridiculous surplus of these foods.

Macha

Is there any alternative to keeping CAP or whisking it away?

A "softer landing" (if I dare use that phrase..)? Surely the complete lack of market signals for pricing in for food is crazy.

seamus

It's a thorny one really. Price control will always be an issue because the larger producers will always be able to undercut the smaller ones. By its very nature, you can't control free market economics and ultimately the most efficient will always come out on top.

Car manufacturing is the perfect example of this. Back in the 1950's, there were roughly 50 major car manufacturers. Now aside from foreign producers, the US has just 3 major makers. And GM looks like it's about to go down the pan.

I think the problem with farming is that unlike most other industries, farmers won't find alternative employment or be "bought up" by the bigger producers. They'll just close down. Ireland in particular still has a relatively large amount of people employed in agriculture, and if exposed to the free market, I don't think there's any way we could compete with foreign producers who are enormous, even in comparison to Avonmore, for example.

Macha

What about the internalisation of environmental costs? Carbon taxation on imported goods? Just thinking out loud here.

Better information for the consumer, in terms of use of hormones, etc in non-EU produced food?

dresden8

Food production is a strategic asset, arguably more important than nuclear weapons.

Food production and the farming industry will not be allowed go down the pan or jeopardised. Western Europe's last famine was in Holland in the winter of 1944/45. Approx. 40,000 people died from hunger and related illnesses as the food production and distribution system broke down due to the ebb and flow of war.

People forget that Europe's institutions grew directly out of the second world war experience. The Atlantic convoys might not get through next time.

mickos

The consumer is as much a benificiary of the CAP agreement as the farmer in that without CAP food prices would sky rocket. The majority of farms are totally unviable at current market prices and rely on subsidies and off farm income. People can moan about subsidies all they want but the consumer is the main benificary of the CAP policy. And as for Quotas if the market is let over produce it will lead to the old butter mountains and milk lakes of the 1980's and it will be of little benifit to the consumer. Quotas allow for adequate production, there is no need to allow over production.

hatrickpatrick

Well I see what you're saying, but the way I look at it is someone's going to suffer in the short term anyway, either the consumers who are faced with rocketing inflation or else the farmers who'd be faced with plummeting deflation. The question is, the vast majority of people are not farmers so surely it's better, if someone has to take some heat for a while, that it affect the smaller group rather than the massive one?

Macha

hatrickpatrick wrote: »

Well I see what you're saying, but the way I look at it is someone's going to suffer in the short term anyway, either the consumers who are faced with rocketing inflation or else the farmers who'd be faced with plummeting deflation. The question is, the vast majority of people are not farmers so surely it's better, if someone has to take some heat for a while, that it affect the smaller group rather than the massive one?

Surely it should be spread out among the larger group of people who can actual absorb some of that impact ie the consumers, rather than the farmers who have already been pushed to breaking point?

There will always be consumers but as seamus pointed out, do we want our food supply controlled by a few large players? I don't.

cavedave

mickos

The consumer is as much a benificiary of the CAP agreement as the farmer in that without CAP food prices would sky rocket.

Is this true? As in say at the moment a steak costs 5 euro and is subsidised by 5 euro. Without the subsidy your steak would cost 10 euro, but you are paying this anyway in taxes are you not?

If you want to see what would happen without subsidies a look at New Zealand might be an example

Macha

cavedave wrote: »

Is this true? As in say at the moment a steak costs 5 euro and is subsidised by 5 euro. Without the subsidy your steak would cost 10 euro, but you are paying this anyway in taxes are you not?

If you want to see what would happen without subsidies a look at New Zealand might be an example

Yeah well you would be contributing towards it in tax but the money comes from Brussels so..it isn't as simple. Plus, the people who don't even eat steak are technically subsidising the price as well.

Remember all the fishermen going to the EU looking for fuel subsidies? Again, same thing.

Hitman Actual

There's a relevant document here, projecting the impact on Irish agriculture of the planned phasing out of milk quotas. The main point seems to be that by 2016, milk prices will have decreased, benefiting the consumer. But at the same time, the value of the dairy sector increases due to increased production volumes, so the farmer doesn't necessarily lose out due to the lower milk prices either.

Edit to add: But as alluded to by seamas, not all farmers will be safe, as due to lower milk prices, smaller higher-production-cost farmers cannot survive.

hatrickpatrick

Surely it should be spread out among the larger group of people who can actual absorb some of that impact ie the consumers, rather than the farmers who have already been pushed to breaking point?

Under normal circumstances this may be true but at the moment consumers everywhere are being "stretched to breaking point" by the credit crunch and the subsequent recession. Any possible lowering of prices would be a good thing for consumers at the moment... It'd be good for the economy too, as lower prices = more consumer confidence.

Macha

hatrickpatrick wrote: »

Under normal circumstances this may be true but at the moment consumers everywhere are being "stretched to breaking point" by the credit crunch and the subsequent recession. Any possible lowering of prices would be a good thing for consumers at the moment... It'd be good for the economy too, as lower prices = more consumer confidence.

I don't accept that consumers are really stretched. They may not be able to afford the same luxuries like holidays and flat screen TVs, but they can still afford food.

In fact, in the 1960s the average family spent 30% of its disposable income on food. Now it's closer to 10% - and you want prices to go down further??

Farmers are far, far closer to breaking point than consumers: consumers just whinge about it more and remember, many people today (myself included) have no memory of the last recession in the 80s and have no REAL knowledge of what poverty actually is. So much of their opinion would be based on a comparison with the wealth of the early 2000s.

I fail to understand this complete obsession with appeasing consumers, other than vote-scoring and "consumer confidence". Farmers go out of business, rural Ireland empties out, animal welfare goes by the way-side, the environment is severely compromised and kiwis are flown in from the other side of the planet - just for the consumer??

We have a habit, in this country, of just looking at things from one point of view. I remember a few weeks ago people in the radio were lamenting the lowering of rents and totally ignoring the fact that this was good news for the many thousands of renters!