Describing the insane EU milk production quota scheme, the
Economist (subscription) hits the nail smartly on the head:
It is an EU rule that unintended consequences, left for a few years, fossilise into special interests.
Smaller businesses' stupidity is for the most part self-terminating. If they don't succeed they go out of business. But larger corporations and governments are too big to fail, and their stupidity doesn't just linger: can be self-reinforcing. EU agricultural production subsidies were quickly capitalised into land values, and milk quotas in the Netherlands have taken the form of transferable, expensive, lump sum welfare entitlements. The
Economist continues:
Older Dutch dairy farmers may hold quotas worth €1m, which they can sell when they retire. The financial impact on these folk would make it politically hard to scrap quotas overnight, say Dutch farm officials, even if it would help younger farmers, for whom quotas are a big disincentive. “The quota system was never meant to be a retirement scheme, but it has worked out that way,” says an official.
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