2013 – 014 British Farming and the original model for the Common Agricultural Policy

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BRITISH FARMING AND THE ORIGINAL MODEL FOR THE COMMON AGRICULTURAL POLICY
by Edward Spalton

Since 1 January 1973 Britain has not had an agricultural policy of its own. British farming and food production have been entirely controlled by the European Common Agricultural Policy (CAP) with the institutions of the UK as its agent. This is a very short note to sketch in outline what our own policy used to be like, what we got into in 1973, where that policy originated and what it is like today.

The 1947 Agriculture Act

Britain had come close to starving twice through submarine blockade in both wars and was also very short of foreign exchange. It was therefore decided to have a policy which would encourage the production of a considerable proportion of our own food whilst allowing all the world to send its food here without customs duty. Farmers received subsidy from the taxpayer to ensure a price at which an efficient farm could be profitable. This was negotiated each year in a price review between the farming organisations and the Ministry of Agriculture, subject to parliamentary approval. So, if the world price of (say) wheat was £25 per ton and and efficient British farmer needed £30 per ton to be profitable, a “deficiency payment” of £5 per ton would be paid. Without this British farms could not compete with overseas areas enjoying more favourable climatic and other conditions. Thus the taxpayer paid once for a degree of food security but the market was otherwise allowed to operate freely. There was bureaucracy but very little by present day standards. Low food prices assisted the less well off and reduced pressure on wages. It was a simple, logical system for a largely urban population . Commonwealth and other countries could ship their produce here freely and our industrial exports flowed in the opposite direction.

The Approach to the changeover

 

The British government tried from the early Sixties to become a member of the European Economic Community, which was called “the common market”. By the early Seventies, they were telling people that the Commonwealth countries no longer wanted anything to do with us and that our future lay in Europe. As soon as we were inside the Common External Tariff of the EEC, our exports to Europe would boom. I recently (2013) heard a recording of Roy Jenkins saying this and well remember a young John Selwyn Gummer, now Lord Deben, telling our 1972 corn trade association conference the same thing. As well as sacrificing our own fishery, the government was ready to ditch our traditional food suppliers in the Commonwealth who would be largely excluded from Britain by a high EEC tariff barrier. The British “family of nations” would be deliberately weakened. We would have to switch to buying European for most foods and at prices far above the world prices we had previously paid. People would have to pay much more for their food.

The Common Agricultural Policy (CAP)

 

The original six countries of the EEC hammered out their policy in strenuous negotiations during 1962. These went on so long that four of the delgates had to be carried out, suffering from exhaustion! Like all EEC policies it became binding in its entirety on existing and future members.

 

Put very simply, the policy kept out most temperate foreign foods by high import duties. It guaranteed prices to farmers by providing a buyer of last resort. So the consumer paid more for his food and then had to pay taxes so that the EEC agencies could buy up surplus produce at prices which were thought adequate to provide a reasonable living to keep the small peasant farmers of Europe from revolt and communism. This was the origin of the grain, beef and butter mountains and the wine lakes. Agricultural productivity was rising very quickly. With an open-ended guaranteed price for all that was produced, these surpluses became grotesque. Much was exported to countries outside the EEC at prices far below the cost of production, thus destroying agriculture in developing countries.

Even that was not enough and much of the surplus was “denatured” by making it unfit for human consumption, often in animal feed – to produce further livestock surpluses! The French took full advantage of this. After joining the EEC an Irish politician described the CAP as “Ireland’s oil”! They now shipped food to Britain at high guaranteed prices. Formerly they and the French had to compete for our trade in the world market.

Where did the CAP come from?

Obviously, from the negotiations between the original members but it was such a strange policy, so very detailed and ornate that there had to be an ideology, a coherent plan behind it. The official, guaranteed price of wheat, for instance, was calculated from the place in Europe which was reckoned to have the greatest shortage of wheat, Duisburg in Germany. As you travelled further away from Duisburg, the price got a fraction lower each 100 kilometres. It was all very strange and required massive officialdom. Where did it come from? The answer will not be entirely surprising to those who have read books like Rodney Atkinson’s “Europe’s Full Circle” (see in particular pages 54 to 65) and “Fascist Europe Rising” but the precise fit between what was proposed in Berlin in 1942 and what was agreed in Brussels in 1962 is remarkable. The original papers were the record of a conference, entitled

European Economic Community (1942)

Excerpts from the introduction by Professor-Doktor Heinrich Hunke, Economic Adviser to the Gauleiter of Greater Berlin (Dr. Josef Goebbels), President of the Berlin Association of Merhchants and Industrialists.

“Politically the three power pact has restored to honour the age old concepts of life, people and living space and secured a natural order and neighbourly coexistence as the ideal of the New Order for the peoples of Europe. Militarily the basis of English economic policy…is shattered”

“State economic leadership …forms the core of the new theory and practice. It replaces the autonomic egotism and automatic, self-acting laws of the Anglo Saxon theory”

“It contains secondly the obligation that from considerations of European freedom, continental Europe must receive first loyalty in all economic transactions”.

“The old industrialising tendencies which owed their rise to the falling prices of agricultural and raw material producing countries must now belong to the past”

“With an assured demand for agricultural products and raw materials at reasonable prices, a great increase in prosperity has arisen….”

Excerpts from the paper “The Economic Face of the New Europe” by Walther Funk, Reichsminister for the Economy, President of the Reichsbank and Minister for Post War Planning. (talking of the time before the establishment of the Nazi’s EEC)

“Buyers were lacking who were ready to take significant quantities at stable prices”; “self sufficiency in food supplies was lost”; “…securing basic supplies of food and raw materials … a true economic freedom”.

” This space* can however feed and clothe them and amply supply them with all necessary goods”
(* Space = Raum, the European Lebensraum or living space)

“Also the basis of food production, taking into account the possibility of infrastructure improvement, is completely sufficient”.

“Nevertheless as trade within the great economic area, it will enjoy all the advantages of a state-controlled market. The farmer in Norway, the market gardener in Holland and the Danish poultry breeder will need have no concern that they can dispose of their produce or have it left on their hands. They also need not worry that the price will fairly reward their efforts. They will know that their production and sales prospects are secured by inter-state treaties and that there is no more room for speculators and crises”.

The Same but Different

Of course, the economists, ideologues and planners of the Forties could not foresee the huge increases in agricultural productivity which would create the food mountains. The brisk managers of the Third Reich would quickly have adjusted the system. But in the post war Europe it was not so easy to alter treaties, once they were agreed. The French and the Irish would exploit the system for all it was worth, claiming European idealism as they pocketed the wealth of the British housewife and taxpayer. When Britain made reasonable requests for reform, it was often treated with contempt as anti European. In one debate an impassioned French lady proclaimed “We are building Europe and you are arguing about the price of cabbages!”

Eventually reform of a sort did come but for a run of forty years, the EU’s biggest policy and budget item was ruled by the principles and precepts laid down in Berlin in 1942. The similarities of policy are far too great to be merely coincidental. The detestation of genuine free trade and intense dislike of “the Anglo Saxons” (see the list of comments and policies in the fascist 1930s and 1940s with direct equivalents in the 1980s and 1990s in Rodney Atkinson’s book Fascist Europe Rising) remain as fixed attitudes in European economic and ideological circles to this day. The economist, Roger Bootle discovered this on a visit to Germany in September 2012. He wrote. “There is a chasm between us in our understanding of the way the world works”*

The EU system has now “decoupled” farm subsidy from food production. Farmers receive a Single Farm Payment and for what? Well, essentially for being farmers! It is based loosely on what each farm used to produce years ago. Increasingly it is linked to ever more precise evironmental regulation. Through various Directives the EU now has the power to control the intensity with which Britain is farmed. There are incentives for environmental improvements and MEPs recently voted a measure which would permit farmers to claim subsidy twice for the same activity – once for “stewardship” and secondly for the contribution to the “green” agenda!

So the lunacy and opportunities for corruption of a single agricultural policy from Sicily to the North of Finland continue – still hugely bureaucratic, a massive budget item to be funded by contributions from British taxpayers. To use an Irish-ism, it is certain that we will get on better together with our European neighbours when we are apart and not unequally yoked in the alien polity of the EU.

A commentary and full translation of the 1942 papers are available on www.freenations.freeuk.com
under the title “The EU’s Evil Pedigree”.

*Daily Telegraph 30 Sept 2012 “Sensible for Germany to leave euro, but they’re not ready yet”
http://www.telegraph.co.uk/finance/comment/rogerbootle/9577209/Sensible-for-Germany-to-leave-euro-but-theyre-not-ready.html

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T
Another excellent article by Christopher Booker.  As a tremendous fan of Owen Paterson from the time as Shadow DEFRA Minister, he spent a full week at sea in a trawler to understand the CFP at first hand.

The only thing that worries me is his leaning towards acceptance of Genetically engineered agriculture.  The evidence to date, of which there is considerable, is that GM crops are seen by Monsanto and their EU licensees as a means of totally dominating and controlling the world’s food supply, whilst of course making an unbelievable fortune for themselves.

When I first knew Monsanto when I was working for ICI they were a respectable Chemical company.  The outstanding success of Roundup convinced them that their future lay in agriculture.  B&A

Christopher Booker Daily Telegraph  – 23 Mar 2013

It was quite a week for Owen Paterson, our Environment Secretary, who is winning himself a reputation not just as one of the more colourfully controversial ministers in this Government but also as one of the most energetic and effective.

Last Sunday, after trundling a horsebox across England to help his daughter ride at a horse trials event, Mr Paterson flew to Brussels to play a leading role in one of the most important meetings of EU agriculture ministers for years.

Although scarcely noticed by the British media, it consisted of two days of gruelling negotiations to decide the future shape of the EU’s Common Agricultural Policy.

In particular, says Mr Paterson, I was determined to fight off strong pressure from various of my continental colleagues for a move back to the bad old days of ‘production subsidies, butter mountains and wine lakes.

In addition to discussing hundreds of pages of dense technical documents put before ministers from 27 countries, he was also determined to raise the controversial issue of neonicotinoids, the chemicals blamed by environmentalists for damaging Europe’s bees.

Last weekend, he says, my office was swamped with 80,000 emails all protesting in identical terms at my insistence that these pesticides should not be banned by the EU until proper scientific evidence was available from field studies currently being analysed as a top priority by my technical staff at Defra [the Department for Environment, Food and Rural Affairs].

His pragmatic, common-sense line won support from many of his EU colleagues.

Over lunch on Tuesday, however, Mr Paterson and his senior officials were taken aback when the Italians and French sprang an ambush by proposing a change to an arcane clause in an EU regulation.

If they had got their way, this would have cost British taxpayers an extra £250 million a year taken off our EU budget rebate, he says.

This set off an afternoon of frenzied telephone calls between Downing Street, Dublin, Paris and Rome to sort out what looked like a pretty underhand bid to overturn a point which we thought had been firmly agreed between David Cameron and Brussels only a few days earlier.

The talks ended late that evening and Mr Paterson caught the dawn plane back to London for an 8am Cabinet meeting to hear George Osborne setting out his Budget proposals for later that day.

On Thursday and Friday, breaking off from non-stop meetings and speeches to attend the installation of the new Archbishop of Canterbury, Mr Paterson found himself facing an astonishingly abusive flood of tweets and messages on the internet, led by Bill Oddie and by Dr Brian May, the animal-welfare activist, attacking him very personally for everything from his policy on badger culling to his support for fox hunting.

In a long rant from Mr May, which he added to several times through the day on Friday, while Mr Paterson was addressing the annual conference of the Federation of Small Businesses in Leicester, he accused the Environment Secretary of being cruel, cold-hearted, unethical, undemocratic and unscientific as he implored animal-lovers across the land to sign up to the Team Badger petition, calling for a halt to the planned cull of badgers infected with bovine TB.

On Saturday, having finally got home to Shropshire, Mr Paterson ended his week by spending much of the day out in the fields, where he and his wife, Rose, keep a flock of sheep, helping to save dozens of new lambs as they were born into a world covered in a foot of snow.

When, last September, Mr Paterson was promoted to run Defra from the comparative obscurity of his years as Secretary of State for Northern Ireland, he was billed as “the unknown Cabinet minister. .”

Since then, not a week has gone by when he has not made headlines, as he has had to step into one crisis after another: from dying ash trees to dying bees, from badger-culling to the furore over horse meat fraud.

While many of his Tory colleagues have been wrestling with how their party can again re-engage with Conservative values, Mr Paterson has been throwing himself into his taxing new job in a way that he hopes shows Conservative values in action.

He has also attracted attention for his robust views on other issues, from his opposition to gay marriage and his wish to see a return to the proper fox hunting he used to enjoy, to the wind farms he has long opposed as a hideously expensive blight on the countryside, serving very little practical purpose.

In at least three respects, it was an inspired move by Mr Cameron to appoint Mr Paterson to head a department with an almost absurdly wide range of responsibilities, from farming and fisheries to food safety and flood defences, from waste disposal to water policy.

First, it might have seemed counter-intuitive to put the most trenchant Eurosceptic in the Cabinet in charge of the ministry that more than any other in Whitehall is subject in almost all it does to policies and laws decided in Brussels.

In fact, Mr Paterson, who speaks French and German, knows and loves Europe and its peoples as well as any “British politician” but he also knows much better than most how our European system of government works.

It was this that, when the horse meat scandal erupted in January, enabled him to see at once that the real problem was the way the system of regulations introduced by the EU after it took over responsibility for food safety in 2002 was a standing invitation to fraud, because it forces everyone to rely on a paper trail rather than on rigorous inspections.

It was because he had done his homework that Mr Paterson was able to take the lead in Brussels in trying to tackle the problem, working closely together with Simon Coveney, his Irish opposite number, and Tonio Borg, the EU’s health commissioner.

He was the first politician to talk to Europol, supported by the French and the Irish, because they were in the best position to coordinate a thorough investigation into what has become a Europe-wide fraud epidemic.

When Mr Paterson referred in speeches to the regulation that he saw as the root of the problem, 178/2002, he was so far ahead of the field that it left Mary Creagh, his Labour opposite number, floundering in trying to portray him as no more than a dithering accomplice of the food industry.

Secondly, Mr Paterson is the first Defra secretary to know and love the countryside.

One thing you learn is that for wildlife to flourish, it has to be managed. Unless we manage streams and rivers, they get choked and wildlife dies. Unless we control dominant species, predators take over and kill everything else off.

On no issue has Mr Paterson aroused more bile from the green lobby as in last week’s stream of abuse from Mr Oddie and Mr May than his support for properly targeted control of the badgers that have become such a threat not just to the cattle they infect with bovine tuberculosis, at a cost to taxpayers of £100 million a year, but also to many other forms of wildlife, from hedgehogs and bumblebees to ground-nesting birds.

Indeed, the third reason why Mr Paterson is such an ideal choice for the job is that he is in all things a pragmatist, who likes first to examine all the evidence and then to take decisive action.

I know about badgers, he says, because I really studied this problem in the days between 2003 and 2005 when I was shadow spokesman on agriculture.

I put down 600 parliamentary questions [the largest number ever tabled by an MP on a single subject] and I could see that in every country which had managed to crack the problem of TB in cattle, the answer lay in culling the wildlife species which were the main carriers of the disease.

In New Zealand it was possums, in Michigan it was white-tailed deer” just as it had been in Britain back in the days when we eliminated TB in our cattle herds by controlling badger numbers.

No one could be fonder of badgers than me, he insists, as the only MP who can claim to have kept two orphaned badgers as pets when he was a boy.

But what is really sad about these people who are so fanatically opposed to culling is that they can’t see that the horrible disease of TB is just as much of a problem for the badgers themselves as it is to cattle.

Soon after I became Secretary of State, the NFU asked me to halt the badger culls because it was too late in the year to conduct them scientifically.

“But I am determined to see them carried through now, because unless we get on top of this disease, it will continue to be a tragedy for the countryside, for the farmers, for wildlife in general and for all those sick badgers otherwise condemned to a long and very painful death.

Since taking over at Defra, Mr Paterson has moved decisively on one issue after another. He took a grip on the threat to our ash trees, by halting imports and ordering an exhaustive survey of the countryside so that we can get a really accurate picture of what we are dealing with.

He has taken action on flood defences and fracking, just as he has tried to lead the way in Europe on the horse-meat scandal and food fraud.

Another issue due to make headlines will be a major Bill on Britain’s water policy, soon to come before Parliament.

It is vital that we find ways to reverse the tendency in recent years to charge customers ever more for water while supplying them with less.

“We desperately need to build more reservoirs to store all that water which keeps falling out of the sky ” contrary to the long-fashionable belief that, thanks to global warming, we can expect nothing in the future but endless droughts.

Mr Paterson smiles as he says this. In private he laughs a lot and is much more genially relaxed than he sometimes appears to be in public. And, of course, his pragmatic scepticism about climate change, like his enthusiasms for shale gas and GM crops, is yet another reason why he has become such a hate figure for the green pressure groups.

He enjoys the irony of the fact that, as a practical environmentalist, he is demonised by fanatical ideologues who know rather less about nature and the environment than he does ” just as he does in being the pragmatic Eurosceptic who knows considerably more about how the EU system of government works than those ideological Europhiles like his Labour opposite number, for whom Europe is little more than a cosy abstract idea.

His driving force is make sure you look at all the evidence, only then can you take the right effective action.

In that sense, as one of the few politicians with practical experience of running a business out in the real world he was head of the family leather firm and president of the European Tanners Confederation. Mr Paterson is a true rarity in contemporary politics. He has also in the past eight months blown through Defra like a gale of fresh air.

Whatever else may be said of Mr Cameron, in this instance he put the right man in the right place.

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