The Cooking the Books column from the May 2005 issue of the Socialist Standard
On 22 March the government published a list of firms and individuals in England receiving subsidies under the EU’s Common Agricultural Policy in 2003 and 2004. The figures showed, said the Times (23 March), that: “The biggest landowners, including members of the Royal Family, a clutch of dukes, and agrifood companies, are able to pick up hefty amounts of cash under the Common Agricultural Policy (CAP)”.
The CAP is based on guaranteeing farmers a given price for their products. If market prices fall below the guaranteed price then farmers are paid a subsidy to compensate for the shortfall. The aim was to ensure an adequate and stable internal supply of food and other agricultural products, and involved levying tariffs on imports. In this it was successful, too successful in fact as farmers ended up producing “too much” so that, as this meant that market prices fell, the amount that had to be spent on subsidies increased. Non-agricultural sections of the capitalist class – and EU countries like Britain with a comparatively small agricultural sector – protested and called for the CAP to be reformed.
One step in this direction was the “set-aside” scheme, introduced as from 1993, under which farmers are paid not to grow food. Cutting back production serves to bolster prices, and so the profits that farmers make, resulting in a reduction in the total subsidy bill (the cost of paying farmers not to grow food being less than the cost of making up the difference between the market and the guaranteed price).
The website of the lobby group UK Agriculture (www.ukagriculture.com) describes how set-aside works:
“Set-aside is a term for land that farmers are not allowed to use for any agricultural purpose. It was introduced by the EEC in 1992 as part of a package of reforms of the Common Agricultural Policy to prevent over production of food crops. It applies only to farmers growing crops.
In the first year of the scheme farmers had to set-aside a minimum of 15% of their cropped farmland for the harvest year of 1993.
By the year 2000 the figure had dropped to 10% of cropped land but the amount changes each year according to EEC requirements. In 1999 there were approximately 550,000 hectares of land in set-aside. This represents an area of countryside about 75km by 75km, twice the size of the area enclosed by the M25 around London. In exchange for not planting crops on set-aside land farmers are paid a subsidy by the EEC to counter the loss of income that results from not utilising the land for productive use.”
What is omitted here is that set-aside was compulsory only for the larger, more productive farms. So to them went most of the subsidies for this; which will have contributed to “the hefty amounts of cash” paid to the big landowners and agribusinesses. The Times calls this “obscene”, but that’s because it represents the interests of other sections of the capitalist class who resent having to pay the extra tax. Of course this was disguised as concern that “the food bill for the typical British family of four is some £600 higher per year than it would otherwise be”.
Perhaps, but the abolition of the CAP in favour of free trade in food would not make the average wage and salary worker better off by that amount, instead would exert a strong downward pressure on wage levels. To socialists what is obscene is that farmers, and the most productive at that, are being paid not to grow food in a world where billions are undernourished, if not starving.
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