Gridlock in Brussels over sacred cows
European dairy farmers spray police officers with milk during a demonstration outside the European Parliament in Brussels on Monday. | AP Photo
By Mark Jurkevich
European dairy farmers used more than 1,000 tractors and milk transport trucks to gridlock Brussels on November 26 and 27. They were protesting low milk prices. Using high pressure hoses, the farmers sprayed with milk the European Union Parliament Building, as well as the riot police trying to keep order.
The European Milk Board (EMB) claims 157,000 dairy farmers have gone out of business since the 2009 dairy regulatory reforms came into effect.
European milk farmers drive their tractors down a main thoroughfare in the European Quarter of Brussels on Monday, Nov. 26, 2012. Farmers drove their tractors into the European Quarter of Brussels on Monday for a two-day demonstration to protest against what they believe are unfair milk prices. | AP Photo
Under those reforms, production quotas are raised 1% per year for each country. They define the maximum amount of milk farmers can produce. By limiting supply, government kept prices artificially high. Government also makes direct payments to farmers in return for accepting production limits. In short, the consumer gets hit twice: with higher milk prices, and by paying additional taxes to finance the direct payments to the farmers.
As production limits are gradually raised under the 2009 regulatory reform, and farmers continue producing to the higher limits, the supply has begun to exceed demand. Thus, prices for milk began to go down.
In short, the 2009 reforms are gradually phasing in free-market principals. As the milk market was freed, it exposed the obvious fact that there are far too many dairy farmers with far more capacity than demand can absorb.
The EMB would prefer to go back to the good old days when its members got paid by the government while they tended to cows and enjoyed their farms without having to think about how much milk the consumers really wanted to buy or how much they were willing to pay.
“Our message today is that we need new market regulations to ensure prices that cover costs of production. Milk prices are far too low. Farmers can’t make a living and are closing their businesses,” EMB President Romuald Schaber said in The Daily Telegraph.
Cleverly, the EMB gives its proposed new quota regime a free market sounding name – “Flexible Supply Management.” Under Flexible Supply Management, the farmer would have no flexibility in deciding on how much product to produce; that would be strictly dictated by the government, again.
Currently more than 25% of the total EU budget is spent on the Common Agricultural Policy, or CAP. Of course, government distortions of agricultural markets are not unique to the EU. The United States has its own regulations that match the EU in complexity and market distortion.
The farm lobbies on both sides of the Atlantic have been among the strongest for decades. Having created a narrrative of family farms being a part of cultural heritage, they enjoy strong public support. On this basis, the lobbies argue that farmers must be protected, regardless of the economic merits.
Boiling down this argument to its essence, the farm lobby argues that society should finance tens of thousands of family farms because they’re living museums that display our cultural heritage.
Neither the EU, nor the U.S., can afford so many duplicate museum pieces to a bygone era of rural farming life. Yes, phasing out agricultural subsidies will reduce the number of farmers, who will have to find a way to make a living in industries that are more in demand today.
After all, we used to have a lot more blacksmiths, lamp lighters and elevator operators than we do today. Thank God their lobbies didn’t convince governments that their profession is a cultural heritage necessary to preserve. Although, it should be noted that “Smith,” and its translation in other European languages, rather than “Farmer,” is the most common last name in the U.S. and Europe.
As budget cuts are being negotiated in Brussels and Washington D.C., there can be no sacred cows that are off the table. Farm quotas, subsidies and tariffs block the efficient allocation of resources and are a large burden that taxpayers in Europe and USA can no longer afford.
A farm trailer with hay burns during a European milk farmers demonstration outside the European Parliament in Brussels on Monday, Nov. 26, 2012. | AP Photo
December 3, 2012 - 6:00 AM
Mark
Another home run. I think you baited the libs on this blog with all of the Russian-Indian love and America bashing in your early articles. Once they trusted you, you started hammering them ever since with tutorials on capitalism and free market economics.
After all of the praise they heaped on you, it will be hard for them to now classify you as a troll. Good job.
#1 You are aware, aren’t you, terps, that Repubs and right wingers in farming area fight getting rid of farming supports while at the same time preaching austerity? It’s not just a liberal thing.
You’re a twisted puppy, terps.
By my comment to terps, I meant that no one on here thinks of Mark as a troll.
I understood your comment, Debbie. terps is completely incapable of grasping that many people hold views on different topics that might be viewed as “leftwing” or “rightwing”, and not always the same on every topic. He sees the entire world through his RWer lens and can’t conceive that other people are engaged in more nuanced thinking. Ergo, Mark’s seeming inconsistancy has to be some sort of deep dark plot to suck us in.
When the wingers bellyache and whine about “entitlements” and “gifts”, I can guarantee you they don’t mean farm subsidies. It’s why they can’t be taken seriously.
#4 The only person I’m aware of who has even suggested that anybody might want to label Mark a troll is terps himself.
Cue, Saint Suziah, and terps, long drawn out psychotic comments on how Obama and the communists have been planning the take over of the milk market… This all because Obama’s real dad is a milkman!
Kristen
Unfortunately, I have to agree with you on one point. Republicans and Democrats both pander to the farm lobby to keep the subsidies alive. Republican PHILOSOPHY opposes subsidies to farmers but, in practice, they are just as bad as democrats.
Yeah, that leftwing farmer’s lobby in America is a witch all right. I get it that you have no clue about liberals terps, but it would behoove you to know your own people.
The more things change:
http://www.heritage.org/research/reports/2002/04/agriculture-lobby-wins-big-in-new-farm-bill
The more they stay the same:
http://www.businessweek.com/news/2012-10-01/farm-fiscal-cliff-prods-congress-to-rewrite-law-bgov-barometer
“The Farm Bill is a Jobs Bill”
“a bipartisan pork barrel spending spree.”
http://www.aem.org/News/Advisors/AEM/?A=844
http://www.farmbillnow.com/
http://www.washingtontimes.com/news/2012/nov/22/farm-bill-may-help-congress-avert-the-fiscal-cliff/
Kind of sucks having to admit to agreeing with a liberal, huh terps?
I agree that “there can be no sacred cows”, but in reality, there are sacred cows for a very good reason. You cannot simply pull a plug and expect people, farmers, workers or the poor, to suddenly make it on their own without whatever has sustained them. Certainly in this nation, we are generally talking about huge farms and factory farms as opposed to the small family farm that is always portrayed in the news of Farm Bills.
Changes/reforms, to be accepted, have to be fair, incremental and working toward a goal. Politicians in many nations do not seem to grasp that truth.
Look at how much money, the wealthiest among us spent on trying to avoid paying or paying more taxes? That is most certainly the equivalent of driving your tractor to slow up a city or spraying your milk on the riot police to make your plight and position known.
Debbie, it’s a Christmas miracle!
#9 Shucks, he agreed with two liberals. Must have REALLY hurt terps to agree with me. So much that he couldn’t even say it.
LOL Kristen!
Sandi#11 worte “You cannot simply pull a plug and expect people, farmers, workers or the poor, to suddenly make it on their own without whatever has sustained them.”
Sandi, I would hardly call the EU’s 2009 policy of raising the production ceiling 1% per year . And for that we have these demonstrations and milk being sprayed on police and Parliment.
Ooopslet me try that again.
Sandi#11 wrote “You cannot simply pull a plug and expect people, farmers, workers or the poor, to suddenly make it on their own without whatever has sustained them.”
Sandi, I would hardly call the EU’s 2009 policy of raising the production ceiling 1% per year a sudden pulling of the plug. And for that the farmers make these demonstrations and spray milk on the Parliment and police.
Mark, I agree. Farm subsidies should be scrutinized. Sadly perhaps, the “family farm” as we remember it is rare. I suspect many of the largest subsidies go to large farming conglomerates. As Sandi suggested, I hope that cuts to these subsidies can be accomplished in a balnced manner.
There are fewer and fewer small farms run by “mom and pop” in the US. A “small” farm as categorized by the US government is that which has a gross income of under $250,000; large family farm(gross income $250,000 – $500,000) and very large (over $500,000 in income). Few small farmers and “micro” farmers receive subsidies – in fact, most small farmers (which is a category my husband and I fall into) get minimum technical or financial help. Very large and large farmers consume most of the $240 billion farm subsidies – without any real oversight – they encourage the hogs to keep their heads in the public trough.
I, for one, would like to see farm subsidies completely eliminated. When the government pays farmers to plant or not plant something is very wrong. Providing somewhere around 75% of farm funds to these agri-businesses has become acceptable to the public, as subsidies are cloaked in nice sounding terms like “family farm” aid. However, subsidies ” are concentrated in the hands of a small number of large farming operations.” If asked, most Americans would support subsidies for farmers, but they are hoodwinked into the delusion of family farms like “American Gothic” receiving abundant aid, which I can assure you we [small farms] are not.
In fact, “in 2011 more than 10,000 individual farming operations have received federal crop insurance premium subsidies ranging from $100,000 to more than $1 million apiece.”
When money is dolled out, rarely is there any determinant or reasoning for who will receive funding. “The subsidies go to large operators with no conservation strings attached to protect water and soil, no means testing, and no payment limit on how much a farm business can collect.”
Why aren’t republicans demonizing these agri-businesses as “moochers” or “welfare farmers”? Why not cut out the cost of subsidies from the budget and return it to the revenue side? These very large farm operations are assuredly addicted to the public trough as any other subsidized business – however, they should be allowed to go through withdrawal – stand on their own to either succeed or fail. It’s time to remove the “needle” of public funding from the proverbial arm of the largest agri-businesses.
citations from: http://farm.ewg.org/
It is an ages old dilemma, but “the efficient allocation of resources” is not always the right or only answer. There are some heritage and other items that need to be preserved; that better a society, even if they cost that society some money.
I do not think subsidies, in any nation, should be for any farm that is not a small family run farm. Factory farms were never meant to be what we subsidized IMO. But allowing farms to overproduce what the market will bear serves whom?
Maybe, just maybe we can get the Republicans to look at all the National Government subsidizing done through “tax expenditures” e.g., the exclusions, deductions, exemptions, accelerated depreciation, credits etc enjoyed by agribusiness.
That might be the logical first step, in fiscal responsibility.
IMHO, we need to take a hard look at subsidized businesses — particularly those subsidized through tax expenditures, the GOP is big on subsidize agribusiness, the fossil fuel industry, and a host of other businesses that donate to Republicans or hire lobbyists to look out for their interests. This is the activity that progressives denounce as “corporate welfare” – a charge that many Republicans seem not to even acknowledge.
All that said, I am happy to grant that there are many issues where reasonable Americans can disagree yet still compromise. I will even stipulate that most Americans love our country and have its best interests at heart. However as I said in an earlier thread, IMHO the true obstacle to solving the ills of our times is the authoritarian segment of 1%ers and the other shakers and movers who seek personal wealth and political power at the expense of the wider population and who are seeing their power and control slipping. They also seem to have an element of fascism, in that they seem to be seeking to establish (likely to reestablish in their mind) their view of a nation defined by personal connections of ancestry and culture. IMHO, they are the real angry white men fighting to stop the control slipping out of their hands and into the hands of “the diverse, colorful, polyglot everybody else.” And a good segment of those 1%ers and the other shakers and movers are fat cats getting fatter off of subsidize agribusiness’ “corporate welfare.”
Re: Nosaj @ 11:13 am
I don’t expect to ever see the family farm on my childhood return.
In fact, I have worries of another dust bowl. But that is a different issue.
However, IMHO it is long past time to shut down the “corporate welfare” of the subsidize large-scale agribusiness.
Large-scale, industrialized, vertically integrated food production is here to stay and it does not need (albeit it certainly enjoys) the romanticized and exalted status of being something akind to mother & apple pie — but yet it is just another big business and reap more tax support than wheat.
See: http://tinyurl.com/cfch7o and http://tinyurl.com/cpmz5pz
ALSO, IMHO, institutions such as hedge funds, pension funds and investment banks have been instrumental in pushing up prices to 30-year highs. Buying and selling futures on a food item you have no facilitates to process / use / sell contributes nothing but cost to the end consumer.
Good point Hillary/#18 about subsidies not going to small farm operations in the U.S. like they are in Europe. I’ve heard comments like yours from other small farmers, and they all think it’s very unfair for our government to help the big farms, especially when they already have the advantage of “economics of scale”.
Well said Dave Hicks #20 at 12:24PM! I agree.
Right On as usual Hillary!
Shrillary#18. Thank you for the informative and well written comment. It gives everyone a lot to think about.
I recall Dan has a comment of the day, or something like that. It would be great if he elevates this comment for more people on the blog to read.
I think the issue is gaining relevance. Over the last few days Obama surrogats have been taking aim at agricultural subsidies, as a feature of spending side reduction to avoid “the fiscal cliff.” I think a big reason has to do with crass politics – the farm belt is in the red states, and hardly affects “blue constituencies.”
It is very clever politics by Team Obama. However it is more of the nasty cynical and divisive politics, rather than a step towards seriously addressing the federal government’s unsustainable spending crisis.
In a case of absurdity, beekeepers are sustaining huge losses through colony collapse, and the government has allocated $125,000 [statewide] towards those losses. The problem again arises when the commercial beekeepers can be paid up to $10,000 [$200 per hive] for bee losses – and, as with the giant agri-businesses, the commercial beekeepers will get the lion’s share, leaving the small production beekeepers out of luck.
When a commercial beekeeper sustains a loss of 100 hives out of a couple of thousand, revenue will be made up on the remaining hives. When a small production beekeeper with 25 hives loses half, there is no way to make up any revenue. Commercial beekeepers are impacted of course, but not in proportion to the smaller beekeeper – yet the money will flow to the commercial beekeepers.
Again, colony collapse is a serious problem, and the loss of the pollinators resonate throughout the food chain – but the government should not be paying the commercial bee operations for losses – that is a cost of doing business and is why crop insurance becomes available for farmers. The government, except in special circumstances, need not be in the business of propping up through subsidies, the giants in the farming sector, nor any other commercial industry
Shrillay#26 – Please explain the term “pollinators” in your post.
Hillary @ 5:01 pm Amen!
MarkJ – thank you for your comment. I will, however, take issue with your assumption that going after farm subsidies is “crass” politics and targeting red states. California is as blue as blue can be, and is the nations most productive state for agriculture. New York and New Jersey both contribute produce and large quantities of dairy products – both are blue states. All these states would ultimately be impacted by cutting or eliminating farm subsidies.
I also don’t see eliminating farm subsidies as a blue or red state issue – I see it as a practical solution to a bloated USDA budget that no longer serves the purpose originating from the needs of farmers during the Great Depression. Government manipulation of crops through subsidies either leads to an overproduction of one crop at the expense of another, or artificially raising the price of commodities like milk or sugar.
Allowing the market to determine production, diversity of crops and innovative farming techniques would be more beneficial to the agricultural community than handouts.
MarkJ – pollinators are any insects/animals that transfer pollen from one part of a plant to another = pollinating = seed production. Without these pollinators, for example the honeybee, bumblebee, butterfly and even ants, trees and plants would not produce their fruits, nuts,veggies, etc. The loss of these pollinators would impact all aspects of the food chain.
Pollinators are bees used just to pollinate crops..
they arent used primarily for honey.
Bees are hauled around the country to pollinate as the bloom season
takes place north to south during spring.
All of the bee activity is not just for honey production.
Not for nothing, but Blue States have people who eat, and farm, in them too. As Hillary said, California, certainly, New York, Pennsylvania, Ohio, and other Blue States have farming and receive subsidies too. This is NOT a Red/Blue issue.
Hillary#29 – Even in blue states like California, NJ and NY, when you look at the voting pattern county by county – the agricultural counties are predominantly Red. Those counties inside the blue states are the ones that will be far most affected by the recent ideas floated by team Obama.
Having said that, clearly I am with you regarding elminating farm subsidies.
A word of caution. The agricultural industry, like most others is now globalized. If the U.S. unilaterally ends subsidies to its agro-industry, the EU and China among others would gain an unfair advantage.
Few people know how huge China has become in the agro-industry. For example, China dominates the garlic, frozen strawberries and frozen fish markets. Wikipedia writes that China now accounts for two-thirds of the world’s reported aquaculture production.
Another great column, Mark J!
And speaking of China – the honey consumers are buying from the chain stores is almost never American. India and China covertly send their honey to other countries to be shipped and labeled, then sent to the US market – hiding the country of origin. The European market does not allow Chinese honey to be imported.
Chinese honey tends to be loaded with heavy metals and antibiotics – and to eliminate the identifying pollen within honey, and block any identifiers, the Chinese heat the honey – eliminating any beneficial properties and flooding the US market with sub-standard “honey”.
Even the well known Sue Bee honey is not American produced honey.
“Having created a narrrative(sic) of family farms being a part of cultural heritage, they enjoy strong public support”
You think family farms being part of a cutural heritage is only a tactically created narrative, Mark?
Seriously?
To convince anyone that you understand that, for both good and bad, the cultural reality of family agri-business is more than an invention, you should tell us about how your views on this have been informed by the agri-business experience in your own family (and adjacent generations). Otherwise we’ll hold you to your claim that it’s merely a tactical creation, and we’ll rate your “student of history” pride accordingly.
MarkJ, I think the President’s strategy of including farm subsidies in his opening budget proposal is very good politics. Politics has long been rough and tumble, crass, petty, dishonest, unethical … hell, you pick the adjective. What the President has done is made an offer with conditions he desires. It is now time for the Republicans to step up and make a counter offer with details about things they desire.
I enjoyed today’s article and the discussion it spurred. Good Stuff.
MarkJ, don’t you love firey critique from anonymous keyboard warriors who tell you that YOU lack credibility?
#36: (sic) cultural
#35 I recently started buying honey at the farmers market and the taste difference between local honey and the store bought stuff is amazing.
Debbie, local honey also is helpful in managing outdoor allergies as the honey is produced using the flora that surrounds us here, and contains small amounts of the allergens thereby building up immunity.
Kristen, with the hayfever I have, I need all the help I can get!
Kristen:
“Debbie, local honey also is helpful in managing outdoor allergies as the honey is produced using the flora that surrounds us here, and contains small amounts of the allergens thereby building up immunity.”
After having nasty problems one season, I decided to try this and have been eating local honey for about 5 years now. There has been a substantial improvement in my allergies.
Interesting, JohnW. Glad to hear some first hand confirmation.
#41 & 43 Sounds like something I need to try.
I’m glad to hear that too, John W.
Another fine example of how European socialism doesn’t work anymore.