OECD says Bertie Ahern got his facts wrong on CAP

finfacts

The European Commision issued a report on the 2004 EU Budget last week which shows that Ireland got net receipts of €1.6 billion - €396 per head of poulation while Dutch taxpayers paid €125 per head to the EU. Ireland in fact received an extra €34 million compared with 2003. Ireland's EU bonanza in 2004 amounted to 1.3% of GNI (Gross National Income) compared with 1.38% in 2003. Two weeks ago, the Taoiseach Bertie Ahern said that Ireland would budget 0.7% of GNI for overseas development aid by 2012.

Wealthy Ireland has received €36 billion in funds from the EU since 1973 ( i.e. Germany, Holland etc).

Ireland's per capita income from the EU's Common Agricultural Policy (CAP) was €453 compared with France's €157. France got €9.42 billion in funds from CAP while Ireland received €1.83 billion.

On Monday, the Financial Times published an article on CAP by Bertie Ahern - basically a transcript of his speech on CAP in Kilkenny in early September ( see detail here: Ahern accuses Blair of "brazen deception and self-interest" as he defends Ireland's EU CAP bonanza ).

Bertie's well paid advisers quoted OECD facts claiming that the US provided more farm supports than the EU. Today, the OECD said that Bertie's claims were not correct. The EU provides more funds for support of agriculture than the US.

Contrary to Bertie's claims, 2003 farm support in the US stood at $36bn or 15 per cent of farm receipts, while in the EU it was $118bn (€104bn) or 36 per cent of farm receipts.

More than 3,000 Irish farmers receive direct CAP payments of more than €40,000 annually - in effect farm dole. The largest recipient beef baron Larry Goodman, receives more than a half million euros and payment is made for even watching the grass grow. In early September, the UN Human Development Report noted that agriculture supports less than two percent of the EU workforce and more than three-quarters of CAP support goes to the biggest 10% of subsidy recipients.

Bertie Ahern's CAP arguments are simply a menu without prices. A key question for him is why should Dutch, German and other taxpayers support wealthy Ireland's farmers?

See EU Budget 2004 report, other related links

From today's Financial Times:

Farm support transfers to the EU and US cover government services and food subsidies
By Stefan Tangerman
Published: September 29 2005 03:00 | Last updated: September 29 2005 03:00

From Mr Stefan Tangermann.

Sir, The article by Bertie Ahern, the Irish prime minister (September 26), quotes statistics on farm support published by the Organisation for Economic Co-operation and Development in its annual monitoring and evaluation report on agricultural policies in OECD countries.

However, some of the numbers quoted are not exact. The figure for the United States seems to refer to our estimate of total transfers to the agricultural sector ($92bn in 2003), equivalent to 0.84 per cent of gross domestic product.

Transfers to agriculture in the European Union (15 members) were larger than indicated in the article, namely $132bn (€117bn) in 2003, corresponding to 1.26 per cent of GDP.

Let me also point out that these transfers include government services to the agricultural sector overall, such as research and infrastructure, and food subsidies such as food stamps in the US.

The OECD also publishes statistics on support to farmers. In 2003, such support in the US stood at $36bn or 15 per cent of farm receipts, while in the EU it was $118bn (€104bn) or 36 per cent of farm receipts.

Stefan Tangermann,

Director for Food, Agriculture and Fisheries,

Organisation for Economic Co-operation and Development,

75016 Paris, France

mike65

Is this a press release?

The CAP should be killed off asap. We should follow the New Zealand model.

Mike.

Lemming

mike65 wrote:

Is this a press release?

The CAP should be killed off asap. We should follow the New Zealand model.

Mike.

Pardon my ignorance Mike, but what exactly is the New Zealand model?
(incidentally I agree that the CAP should go. It's ultimately unsustainable)

DadaKopf

Hey, finfacts, no advertising.*

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*Mods, this is advertising.

mike65

Lemming wrote:

Pardon my ignorance Mike, but what exactly is the New Zealand model?

Basicly they went through a period of uber-Thatchersim and cut subsidies to nothing in a sink or swim exercise. It worked, now kiwi commodities are at 'world' prices and they have a robust export sector.

http://www.fedfarm.org.nz/speech%20notes/SN_09-01-tom_lambie.html
skip down to the section The Economic Reforms post-1984

http://www.newfarm.org/features/0303/newzealand_subsidies.shtml

Mike.

defiantshrimp

New Zealand is committed to free trade and has very low trade tariffs, i think that is what he meant. They also have low or non-existent farm subsidies to my knowledge.

netwhizkid

mike65 wrote:

Is this a press release?

The CAP should be killed off asap. We should follow the New Zealand model.

Mike.

Wow that has to be least intelligent post ever,
The New Zealand model is Capitalist farming, Basically all they do is extract as much as they can with little concern for the enviornement or anything else for that matter, You must remember that New Zealand has massive tracks of brilliant farming land, We have got the golden vale in Cork and Kilkenny and the Eastern half of leinster, Most of Kerry all connaguht and Donegal, is moors and bogs, The nonsense that we should introduce Thacherite policies into the rural life blood of farming is preposterous, You clearly have no understanding of Farming have you? The New Zealand model puts the small farmer out of business and introduces Ranching similar to the American System. Pure and utter nonsense, Farming for me and other country folk is not a career but a life that there is nothing to beat. Cap is what is sustaining rural Ireland, you take that away and you Kill rural Ireland.

dahamsta

mike65 wrote:

The CAP should be killed off asap. We should follow the New Zealand model.

The CAP is obviously abused on an enormous scale and should probably be abolished, but I don't see how you can base the economics of the European Union on those of a single country.

adam

shotamoose

netwhizkid wrote:

Cap is what is sustaining rural Ireland, you take that away and you Kill rural Ireland.

Well if it's so important to you and to the rest of us it should be no problem paying the extra taxes it will take to fill the gap when we stop demanding that the rest of Europe support rural Ireland. I mean, if it's worth the price it's worth the price, right?

mike65

Ken Shabby wrote:

but I don't see how you can base the economics of the European Union on those of a single country.

adam

That prompts a thought - imagine if a member of the EU abandoned the CAP unilateraly. That would set the hungrey cat among the fatted pidgeons.

But why not,eh? The only reason the CAP still exists is cos no-one has the balls to imagine a world without it.

If Ireland said enough of this (we won't take your money (cue coughs and spluttering)) we'll allow free-market prices for all crops and other commodities. Those who prosper carry on, be it in traditional forms of produce or in new areas like alternative fuels, medical/pharma crops and forresty on a greater and more varied scale.

Meanwhile the rural economy can also be moved up the ladder with greater use of techology - you know, broadband. So people who would otherwise end up in towns and cities can work from rural locations. Sure plenty of milk would be spilt but in the long run I think we'd be better off as that part of the economy would'nt be earning a living on the back of a handout, which is what the CAP ultimately is.

Okay thats enough idle musing about what will never be...

Mike.

dahamsta

That would defeat the purpose of communities like the European Union imho. Unilateralism is not the answer. If Ireland wants to pull out - yeah, right - it should tackle the issue politically.

bonkey

mike65 wrote:

Meanwhile the rural economy can also be moved up the ladder with greater use of techology - you know, broadband.

I don't know.

How would broadband improve the rural economy? Lots of mom n pop websites selling farm produce over the intarweb?

jc

netwhizkid

netwhizkid wrote:

Wow that has to be least intelligent post ever,

Banned for a week for that.

The New Zealand model puts the small farmer out of business and introduces Ranching similar to the American System.

The U.S must be the most subsidised farming system in the World

Pure and utter nonsense, Farming for me and other country folk is not a career but a life that there is nothing to beat. Cap is what is sustaining rural Ireland, you take that away and you Kill rural Ireland.

Do you really? The CAP restricted growth in its form to date actually.
There is a level of viability and the way the CAP was implimented with quota's here restricted farming in a lot of cases from reaching that level.

bonkey wrote:

How would broadband improve the rural economy?
jc

My next door neighbour has moved from Dublin to here and is working from home thanks in large part to broadband.

edanto

I find it pretty embarassing that our head of state got pulled up on his facts by an OECD director in the letters page of the Financial Times.

Seriously, the ins and outs of CAP aside (incidentally, I think it's mostly a waste of money), it doesn't do our reputation with the OECD or FT readers any good if the Taoiseach can't even get some numbers right. Did he mix up 'transfers to agriculture' and 'farm support'? (Not that I know the difference either)

Perhaps there are different ways of interpreting OECD figures and maybe Bertie can make a case for his, but from the letter in the first post, it looks like he made a mess of the article . Can any FT subscribers say if this would be a fair comment?

ShelbourneUltra

I think CAP should be reformed so that the EU buys most of its food from Africia. The EU farmers should be given money just to maintain the land, like caretakers with some production of niche products