Rotten subsidies

Some time ago, I bought a bottle of a very cheap and at the same time very high-quality French wine in an unnamed retail chain. Its low price unpleasantly pleased me as an end consumer. On the other hand, I was aware that the dumping price of the bottle was severely depressed by the European Union's Common Agricultural Policy, from which France benefits the most.

Subsidy
subsidy


Agriculture is, in short, a privileged sector. As? There is a lot of evidence available: a full 55 percent of the EU's $ 42 billion budget goes to farmers every year. This is despite the fact that in most Western European countries, less than 5 percent of the population does not live on agriculture. In addition, most EU directives and regulations apply to agriculture.

In short, the Union has turned into a bureaucratic mocha favoring a small group of the chosen, which is detrimental to us all as a result. Not every product is cheaper due to EU interventions, and many of them have even become more expensive due to illogical market regulations. A binding example is sugar, the price of which has almost doubled with the Czech Republic's accession to the European Union. Many sugar factories received support for not producing anything or closing their production once and for all.

Self-sufficiency?

So do subsidies whose common denominator is the magic phrase "food self-sufficiency" make sense at all? Although independence from the environment sounds tempting, it is naive to assume that we will maintain it in the event of any large-scale natural disaster or war. Of course, even more than 36 billion crowns traveling into the pockets of Czech farmers will not change the situation.

our farmers At the same time, in 2008 they proved that market laws also work in this sector and that it is possible to sell production even at the price set by demand and supply. It is clear from this that the price of agricultural commodities is also largely driven by the world market, and any subsidies therefore make no sense.

Some experts even claim that EU support directly harms poor African countries, where growing one crop or another would be much more economically viable, but thanks to our subsidies, the products there are incapable of competition. This view is held, for example, by Hans Rosling, the creator of the website gapminder.org. When I read Rosling's critique, good French wine for grandma, I suddenly enjoyed less.

In addition, most EU subsidies are playfully swallowed up by large multinational corporations, while small and medium-sized farmers have to make a much greater effort to obtain them. In a distorted market environment, it is much more difficult for them to constantly introduce the new methods and innovations required by the Union.

I therefore think that, if there were a widespread abolition of subsidies, ie the establishment of a classic market competition, most small and medium-sized farmers would welcome the change. However, we should not have lobbying and, above all, corruption, which is ubiquitous in the European institutions. It 's just not talked about much…

The article was originally published on Finmag.cz

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