DYSFUNCTIONAL EU – MILK QUOTAS – COMMON AGRICULTURAL POLICY

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A comment by Anthony Sargeant:

In 2015 the EU commission headed by Jean-Claude Junker and as part the highly protective and subsidised Common Agricultural Policy removed milk quotas across the EU. The message to dairy farmers across Europe was “expand”.

As a result Dutch Farmers increased their herd size by 200,000 in just two years and invested in more high-tech automated milking systems. But please note, this was not for Dutch or even European consumption but primarily for export to other, especially third world developing, countries (The Netherlands exports something like 80% of its agricultural produce).

Given the nature of the EU’s Common Agricultural Policy (CAP) this vast over-production might look like ‘dumping’ of produce on the developing world. Such dumping destroys local production and farmers in the third world who are unable to compete. There is a view that this is immoral.

But now the farcical but tragic EU dysfunction. Two years after encouraging farmers to increase production the European Commission is saying that the cows are a problem. Cows produce muck which is normally spread on the land and which in moderation is not a problem, but in excess it contaminates the land and water sources in the form of phosphates and nitrates. As a consequence the EU commission is now compelling Dutch farmers to slaughter  200,000 cows (yes you are right that is the number they encouraged the Dutch to increase their herd size by just two years ago) with immediate effect. The consequence is a tragedy for those Dutch farmers who invested millions of Euros in expanding herds and installing expensive milking systems. Now those very same farmers are being encouraged to slaughter their cattle and leave the industry with financial incentives so to do.

If you want to see a summary of this example of EU dysfunction look at BBC 1 Countryfile for the 9th April on Catch-up.

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How long before the EU house of cards collapses?

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The EU is dysfunctional, anti-democratic, and most importantly immoral in its dealings with the developing world.

The EU Common Agricultural Policy, results in tariffs imposed on agricultural products from abroad and the more those countries try to add value so the tariff increases.

Take the example of coffee. In 2014 Africa —the home of coffee— earned nearly $2.4 billion from the crop. Germany, a leading processor, earned about $3.8 billion from coffee re-exports.

The concern is not that Germany benefits from processing coffee. It is that Africa is punished by EU tariff barriers for doing so. Non-decaffeinated green coffee is exempt from the charges. However, a 7.5 per cent charge is imposed on roasted coffee. As a result, the bulk of Africa’s export to the EU is unroasted green coffee.

The charge on cocoa is even more debilitating. It is reported that the “EU charges (a tariff) of 30 per cent for processed cocoa products like chocolate bars or cocoa powder, and 60 per cent for some other refined products containing cocoa.”

The impact of such charges goes well beyond lost export opportunities. They suppress technological innovation and industrial development among African countries. The practice denies the continent the ability to acquire, adopt and diffuse technologies used in food processing. It explains to some extent the low level of investment in Africa’s food processing enterprises.

see https://capx.co/how-the-eu-starves-africa-into-submission/