Fat Cows in the European Union
December 8th, 2005“A typical cow in the European Union receives a government subsidy of US$2.20 a day. The cow earns more than 1.2 billion of the world’s poorest people.” Wow! This is a direct quote from Mark Vaile, Australia’s trade Minister. (The full text of his speech.)
One of my regular complaints is that our country worries too much about protecting our relatively rich working population. And that protectionism hurts poor people elsewhere. When we protect certain industries or jobs here, we sometimes prevent the poor elsewhere from being able to get work. Mark Vaile’s comment above is a fairly disjointed and not a completely useful argument. But it is certainly a riveting statement!
I found the gist of that quote in today’s New York Times in an article about subsidies for farmers. Apparently, technology has allowed food production to boom even in a year of relative drought. Despite the worse rainy season in 17 years, farmers in the US Midwest had the second largest harvest ever! And of course we have far more corn than we need and we subsidize the farmers. This all means we end up dump the extra food overseas to protect prices here. Unfortunately, this means farmers in poor countries have to try and compete with our cheap high tech government subsidized corn. The poor farmers don’t have a chance.
Even more frightening is the idea that the US farmers would probably prefer to produce less and net a higher profit on the grain they produce. Producing more costs them more. But the subsidies encourage them to produce more along with the high tech new seeds that make it relatively easy. So instead of letting the free market sort things out our system saves some farmers in the US, at taxpayer expense, and hurts the truly poor farmers elsewhere.
A side note, this is one of the things I do like about organic produce and apparently the farmers like it too: Organics crops are a good way to grow less for more money. In some ways it would seem like having expensive luxury organic farmers here in the US and getting the super high tech seeds to the poor farmers overseas would make more sense.
Carl
