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.
Viser indlæg med etiketten Subsidies. Vis alle indlæg
Viser indlæg med etiketten Subsidies. Vis alle indlæg
16. oktober 2007
15. oktober 2007
Discontinuing farm subsidies must lead to tax cuts
Farm subsidies are a kind of forced economic redistribution. The citizens are taxed; then this confiscated property is channeled to selected agricultural enterprises - usually by various "middlemen" in the shape of larger national companies, that takes responsibility for distributing the taxed money in detail.
Here a lot of ignored negative consequences may be identified. The taxed have now lost their taxed means of income to dispose of, as they see fit. They have, in other words, become poorer. They therefore have to change their behavior in order to adapt to conditions, where they are in a worse situation, than without the taxation. Having control of ones income is having decision making power - losing it means losing the power to decide here and now.
This loss in decision making power of course also has negative implications regarding the part of the budget that is used to buy articles of food. But it is important to point out, that the lost income could have been used as diversely as any income can be. Therefore the negative effects of farm subsidies can in no way be isolated to be an issue restricted to agriculture. The confiscation has negative consequences for the consumer in harming his freedom of action with respect to every kind of purchase - and with respect to his or hers ambition to save money or to investing them.
The above also means that it is not only in ones role as a consumer, investor and/or saver, that one has an interest in terminating farm subsidies; but also in the role of a producer of goods and/or services. With more income to spend more freely, there would of course be more income for companies of any kind to compete about. Nevertheless, in the moral sense as well as in the “utilitarian” sense the focus regarding farm subsidies have to be on the primary negative consequence: that the citizens are taxed; that something is taken from them by force; and that their ability to act freely with means provided by their own productivity is reduced. Farm subsidies by way of taxes is simply harming the freedom of the individual, and therefore harmful to his or hers life.
The assessment above, where taxation is seen as the worst aspect of farm subsidies is seldom an issue at all for the political decision makers, when discussions are raised on the harmfulness of these subsides. One central reason for this is that the economists that are advising the political decision makers simply ignore this moral question and therefore also the harm connected to the liquidation of the citizen’s ownership and of his freedom to dispose of his own income as he sees fit. This is of course a rather extreme case of moral evasion on the behalf of these economists (as well as the politicians). Clearly, the economist should have misgivings about this confiscation, and the wrongfulness of the action in itself.
Instead the focus, when there is a discussion about harm, is on what happens with the confiscated property after the income have been taken from the citizens. Here a lot of efforts are spent on describing the surplus production that truly is a consequence of the subsidies. Much time is spent on the subsequent political maneuvers that are necessary in order to make the system of economic transfers "work". Many reports and journalistic articles are written about the "food mountains", "wine lakes" or "carrousel butter" (butter that is first exported cheaply with export subsidies to a country abroad, and then imported back to the original country - usually for use in foodstuff for animals - with a profit to the companies abroad) or feta cheese that ends up in the North Korean dictatorship for "free". Other derived negative consequences of the surplus production are of course the harmful effects on poorer countries in Africa and parts of Asia
Nevertheless it must be stressed that the major problem in connection with farm subsidies is that the property of individuals are being confiscated. This is in fact the worst aspect and the biggest moral issue in this regard. The focus on confiscation and on the immorality of confiscation should therefore also be of primary concern, when the politicians in Europe hopefully set their minds to downsizing and finally abandoning the farm subsidies. This policy should therefore result in the case where the citizens of EU (and North America, and Japan, etc) no are longer taxed as much as when the subsidies existed. The ending of farm subsidies in the EU must lead to tax cuts as well.
From the Copenhagen Institute.
Here a lot of ignored negative consequences may be identified. The taxed have now lost their taxed means of income to dispose of, as they see fit. They have, in other words, become poorer. They therefore have to change their behavior in order to adapt to conditions, where they are in a worse situation, than without the taxation. Having control of ones income is having decision making power - losing it means losing the power to decide here and now.
This loss in decision making power of course also has negative implications regarding the part of the budget that is used to buy articles of food. But it is important to point out, that the lost income could have been used as diversely as any income can be. Therefore the negative effects of farm subsidies can in no way be isolated to be an issue restricted to agriculture. The confiscation has negative consequences for the consumer in harming his freedom of action with respect to every kind of purchase - and with respect to his or hers ambition to save money or to investing them.
The above also means that it is not only in ones role as a consumer, investor and/or saver, that one has an interest in terminating farm subsidies; but also in the role of a producer of goods and/or services. With more income to spend more freely, there would of course be more income for companies of any kind to compete about. Nevertheless, in the moral sense as well as in the “utilitarian” sense the focus regarding farm subsidies have to be on the primary negative consequence: that the citizens are taxed; that something is taken from them by force; and that their ability to act freely with means provided by their own productivity is reduced. Farm subsidies by way of taxes is simply harming the freedom of the individual, and therefore harmful to his or hers life.
The assessment above, where taxation is seen as the worst aspect of farm subsidies is seldom an issue at all for the political decision makers, when discussions are raised on the harmfulness of these subsides. One central reason for this is that the economists that are advising the political decision makers simply ignore this moral question and therefore also the harm connected to the liquidation of the citizen’s ownership and of his freedom to dispose of his own income as he sees fit. This is of course a rather extreme case of moral evasion on the behalf of these economists (as well as the politicians). Clearly, the economist should have misgivings about this confiscation, and the wrongfulness of the action in itself.
Instead the focus, when there is a discussion about harm, is on what happens with the confiscated property after the income have been taken from the citizens. Here a lot of efforts are spent on describing the surplus production that truly is a consequence of the subsidies. Much time is spent on the subsequent political maneuvers that are necessary in order to make the system of economic transfers "work". Many reports and journalistic articles are written about the "food mountains", "wine lakes" or "carrousel butter" (butter that is first exported cheaply with export subsidies to a country abroad, and then imported back to the original country - usually for use in foodstuff for animals - with a profit to the companies abroad) or feta cheese that ends up in the North Korean dictatorship for "free". Other derived negative consequences of the surplus production are of course the harmful effects on poorer countries in Africa and parts of Asia
Nevertheless it must be stressed that the major problem in connection with farm subsidies is that the property of individuals are being confiscated. This is in fact the worst aspect and the biggest moral issue in this regard. The focus on confiscation and on the immorality of confiscation should therefore also be of primary concern, when the politicians in Europe hopefully set their minds to downsizing and finally abandoning the farm subsidies. This policy should therefore result in the case where the citizens of EU (and North America, and Japan, etc) no are longer taxed as much as when the subsidies existed. The ending of farm subsidies in the EU must lead to tax cuts as well.
From the Copenhagen Institute.
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