16 April 2018

The EU: punishing the poor

I set out my main reason for voting for the UK to leave the European Union here. It is not simply that the EU has corrupt, stupid, wasteful policies - most countries have those. It's that the EU has no mechanism by which these policies can be terminated. The EU's Common Agricultural Policy has done much to destroy Europe's environment, raise food prices for all Europeans while transferring taxpayer funds to Europe's wealthiest people and agribusinesses ('One in five [of the CAP's] biggest recipients are billionaires and millionaires'), and it has been doing all this for more than forty years. It swallows up 40 percent of the EU's budget and imposes further costs on ordinary consumers by putting up tariff barriers.
High import tariffs (estimated at 18–28%) have the effect of keeping prices high by restricting competition by non-EU producers. It is estimated that public support for farmers in OECD countries costs a family of four on average nearly 1,000 USD per year in higher prices and taxes. Source
These barriers have helped impoverish Africans by limiting their exports to Europe, and now, equally tragically, the EU is subsidising milk, which gets exported to Africa, and helps destroy the livelihoods of African dairy farmers.
European milk is pouring into Africa, with disastrous effects for local herders and farmers. ...Multibillion-euro dairy multinationals are exploiting rock-bottom European milk prices to expand aggressively into West Africa. Over five years, they have nearly tripled their exports to the region, shipping milk powder produced by heavily subsidized European farmers to be transformed into liquid milk for the region’s booming middle class. This milk rush is ratcheting up long-standing accusations that poor countries pay the price for EU farm policies crafted in Brussels. How EU milk is sinking Africa’s farmers, Louis Nelson, Politico, 8 April
The consequences can be seen in the Mediterranean: desperate Africans sacrificing their life-savings and often their lives, in an attempt to get to Europe.

How do our politicians get away with it? One answer is that nobody, except those with vested interests or their paid agents, can understand the Common Agricultural Policy or, indeed, any other policy throughout the protracted, arcane, corrupt and legalistic processes that lead to their enactment or modification. It's a good bet that if ordinary citizens knew that the CAP means they pay more for their food so as to enrich millionaires, devastate the environment and destroy the livelihoods of millions of Africans, then we'd vote against anyone advocating it. But policymaking is so obscure - deliberately so, perhaps - that apathy rules.

Social Policy Bonds could be the answer: under a bond regime, we'd target explicit goals that are meaningful to ordinary people. There would be many ramifications of such an approach; one happy one would be that corrupt and insane policies, such as the EU's Common Agricultural Policy, would fall at that first hurdle.

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