The EU "re-investing in surplus elimination"

In the The Prague Post there is a news story that clearly illustrates the strange ways of the European bureaucratic elite, and the equally odd behavior and argumentation that this leads to - in particularly within the field of agriculture on the behalf of the producers subsidized.

The Czech Republic has thus become part of the system of economic transfers and redistribution from taxpayers to - in this case - producers of wine. As in the case with the "old" EU countries, the subsidies have now lead to an increase in production.

But reforms that are aiming to address the problems created using the subsidies now meet resistance from these new receivers of the EU-taxpayers’ money.

Below is an excerpt of a Czech protest against the present attempts of reform:

Instead of continuing to fund the elimination of excess grapes through distillation, or conversion to ethanol, [Mariann Fischer Boel, the European commissioner for agriculture and rural development] proposed a scheme to allow wine producers to reorient to other types of farming by receiving reimbursement for every hectare of vines dug up. Since the money formerly spent on distillation would be reinvested into surplus elimination, Pucek says northern wine-producing countries that do not produce excess wine have nothing to gain from the proposal. [My enhancement]

Hence, in stead of the EU paying to insure that part of the produced wine is not being sent to the market to be consumed as wine (…), but in stead to made into a costly form of energy, the Danish Commissioner now proposes that the farmers dig up their vine in the fields, so that they get money for not producing wine at all. (Didn't anyone point out the silliness of subsidizing wine producers in the first place?)

- And in response to this suggestion, the answer from Martin Pucek, who is the secretary of the Czech Winegrowers Association and the one quoted above, then states that this proposal is a bad deal for those who at the time being do not (yet) overproduce!

The dilemma of the commissioners and bureaucrats is quite obvious: They have money to spend due to the taxes that someone has collected for them via the member states. If they simply terminate their redistributive activities, when they are being told by economists that their behavior is pointless, many of the administrators (colleagues in the EU-institutions) will as a consequence become redundant.

Because of this, every new proposal from the commissioners always contains a new suggestion of how to give away the taxpayers money. In other words, from the point of view of the bureaucrat not taking the money in the first place in order not to give money away (and keeping a lot of them too) is simply not an option they themselves want to consider.

Others – that is the political decision makers of the EU-member states - will have to take this decision for them; if they do not then the Eurocrats will continue to replace every one of their old and pointless redistributive policies with newer and even sillier ones.

The Prague Post: Winemakers get boost from EU.

See also: Discontinuing farm subsidies must lead to tax cuts.