Blog Post

AEIdeas

1. Primary farm producers in the world’s developed countries receive about $280 billion a year in government support. In the European Union, farmers receive a third of their income from government subsidies. Beef and veal producers get more than 70% of their income from subsidies. A typical cow in the European Union receives a government subsidy of $2.20 a day. The cow earns more than 1.2 billion of the world’s poorest people.



~Mark Vaile, Australian trade minister in 2005



2. The developed world funnels nearly $1 billion a day in subsidies to its farmers, encouraging overproduction. That drives down prices and leaves farmers in poor nations unable to compete with subsidized products, even within their own countries. In recent years, American farmers have dumped cotton and other products on world markets at prices that do not begin to cover their cost of production. Europe’s system is even worse; the United States’ farm subsidies are only a third of Europe’s. A cow in France shouldn’t make more than a farmer in Burkina Faso. That is just shameful.



~NY Times editorial “Cow Politics” in 2005



3. In 2006, expenditures on the Common Agricultural Policy (farm subsidies) were €49.8 billion, compared to €48.5 billion in 2005. This represents 47% (the largest component) of the EU’s expenditures in 2006, up from 46% in 2005.



~Financial Management in the European Union



And just in case, 47% seems high, it’s actually “low” compared to the past. Until 1992, farm subsidies represented nearly 61% of the EU’s budget. Reminds me of the joke:



Q. How do you starve a European farmer?

A. Weld his mailbox shut.