The NIMBYs are merrily playing the "we can't allow any more houses to be built in the UK because we'd all starve to death" card over at HPC, to which somebody who actually knows what they are talking about responded thusly:
OnTheOtherHand: My father was a farmer and let me tell you there is no problem with self-sufficiency, the problem is all the distorting subsidies and interventions. For example, you'll see the EU CAP encourage French farmers to grow maize, requiring almost free electricty to pump 24 hour irrigation, to turn into silage, to keep beef cattle in barns. Massively, massively wasteful of resources.
Absolutely bonkers when totally free trade would see beautiful quality steak on all our tables from Argentina where cows can eat grass year round out in the fields, but high import tarrifs of 20% see that we spend more to eat worse produce.
This crazy system costs each family 500 quid more each year in higher prices and taxes. We don't need more land, that's why there were land set aside schemes in the EU to reduce food mountains. We have surplus productive land and that's why we have the luxury of being able to offer consumer choice for lower production methods such as organic and free range.
Food security is a nonsense since no block of countries has a cartel on food production like oil. If Israel doesn't want to sell us avacados, no problem we'll get them from Kenya. We need only drop the import tarrifs to the developing world to trigger massive beneficial production and trade with Africa.
Counting Bears
3 hours ago
23 comments:
Quite right.
Some people mean by "self-sufficient" that no food trade should exist at all. If we wanted to do that we would find a very uninteresting diet and probably serious health issues. Like we had in the not-too-distant past...
BE, as a separate issue, the UK is largely self-sufficient in basic foods, and we could easily be >100% self-sufficient if a) we really had to, b) we were prepared to accept a more boring diet and only eat meat two or three times a week, and c) we adopted more (labour) intensive farming methods.
I believe there was something on Guido about farmland being bought up at the moment.
The only reason I can see is that soon home grown produce although still relatively expensive will be economically viable to produce as imported food becomes more expensive.
Yes. The overproduction problem ~( The CAP tries to stop )~ Goes something like this.
Year 1 good weather = bumper Harvest= Market flooded with sellers => buyers can refuse any offer and invite lower offers from the next seller untill the market price is Zero.
=>Farmers go bust
Year 2 Famine.
Thats why (in theory) farmers are paid by CAP to not produce (set aside)Overall the aim is to keep the market price UP rather than down.A huge amount of European wine is distilled into Industrial Alohol each year , a costly process . to keep the price up.
I once converted a chap from all this self-sufficiency baloney with one simple question, to wit: "Should Shetland be self-sufficient in pineapples?"
Den, farmers have somehow coped with this good year/bad year problem for millennia, it is not insurmountable (farmers are perfectly entitled to plough some of their produce back into the soil in the good years, if it so suits them).
D, but at least they're self-sufficient in ponies.
"Overall the aim is to keep the market price UP rather than down"
I think the overall aim of the CAP is to keep peasant farming in France and hobby farming in Germany a viable proposition.
On the original subject, of course we won't all starve to death if more houses are built in the UK, but it does make sense to try and keep the best agricultural land for growing food and not put it under tarmac or houses. I can't remember what proportion of agricultural land is Grade 1, but I think it's fairly small. (Grade 1 land is market - gardening quality - where you get crops like raspberries and strawberries). To turn the argument round, we won't all be homeless if we don't build any houses on Grade 1 land.
B, if we build houses on lower grade ag land (i.e. the hilly and slopy bits where it's difficult to farm with tractors, but on the plus side, less likely your house is flooded and better views) then that's fine by me.
The main drivers of land values (apart from views) appear to be what sort of jobs are within commuting distance and how good the schools are, in other words, where's best for building houses is decided entirely by human activity/decisions, and it can't be rocket science to try and locate these away from tip-top ag land.
People forget what a good system we had before the EU under the 1947 Agriculture Act. The food of all the world could come here without customs duties but to ensure a measure of what is now called "food security" there were "deficiency payments" to farmers, making up the difference between the market price and the price at which an efficient farmer could produce certain crops in UK conditions.
Don't forget that Britain had emerged from a nearly fatal submarine blockade to a post war world where it had little foreign exchange with which to buy anything.
I was in the grain trade in the early Sixties. We complained about the bureaucracy but it was a fraction of what the EU has generated. In fact, the EU spends a great deal more money in Britain and makes food dear, compared to what the tax bill was to keep it cheap.
Every year the deal with the farming community was negotiated in the annual price review and then subject to a parliamentary vote.
I will give just one example. The prices varied a bit but this would be typical . Let us say that the wheat price was £20 per ton because of the free availability of imports. The Ministry calculated that a reasonably efficient British farmer needed £30.
The deficiency payment (based on average market price) would then be £10 per ton.
If a farmer produced a poor quality sample of feed wheat and got only £18 per ton, he would still only get the £10 deficiency payment. So would a farmer whose soil and skill enabled him to produce a high quality bread making wheat at (say) £25 per ton. (which of course formed part of the averaged price)
The corn merchant or end user certified the quantity he had bought, the price price he had paid and that the wheat was of a quality which COULD be made into flour. As people knew from wartime experience, nearly everything COULD be made into flour!
That was it. No intervention buying, no set aside. One subsidy paid once, prices and hence wages kept down, a reasonable proportion of home grown produce guaranteed and minimum interference with the free effects of the market.
Ed, thanks for anecdotal, that sounds like a relatively sensible scheme.
I'm sure we could largely fund it out of the taxes which farmers pay, problem solved, then it's just a glorified insurance-cum-income-smoothing scheme.
Apparently, preventing farmers from forming selling-cartels was a big blow to them, as now the supermarkets can screw down prices; if the farmers earned more money at the supermarkets' expense, they'd be paying more tax and so there'd be more money to fund the income-smoothing scheme.
Selling Cartels
There were a number of these set up under statutory authority in the Thirties to try to get stable, liveable prices. Probably the best known was the Milk Marketing Board which had the monopoly of buying and disposing of all milk produced in the UK.
It was EU insistence that ended this arrangement and gave the supermarkets the whip hand. There were similar bodies for other produce - like wool etc. I grew up under this system and it seemed to work reasonably well although there are doctrinaire free market grounds for objection.
There were also private cartels which operated with legal approval. One was called the Millers' Mutual Association.
With a problem of over-capacity, members established a "datum" level of production for each mill, based on sales of earlier years. If a miller wanted to expand, then he had to buy extra datum from other members. In a way, it was a bit like the present official system of milk quota for dairy farmers.
Not every flour miller was in the Association and I don't really know how well it worked as flour millers, like maltsters, were higher beings in comparison with us mere lowly feed & provender millers and grain merchants.
ES, clearly, I don't really approve of selling cartels any more than I approve of buying cartels, but the supermarkets are de facto a buying cartel and so it's a question of levelling the playing field.
It's the same with trade unions, if there is one very big local employer, then there is a case for trade unions (provided they don't get too greedy, separate topic, their behaviour has been suicidal at times); if there are lots of small employers, then there is no need for them and they don't tend to form anyway.
@bayard: the purpose of the CAP is not so much to keep prices up, but to provide a continuity of supply, thus meaning that prices will be higher at some points, but also lower at some points, than they would otherwise be. The subsidy allows the farmer to not go bust in the bad years (ie when there's too much supply and prices are very low), and continue production the next year, thus keeping supply up and prices down. It smooths the cyclical nature of agricultural production. People only see the cheap imports and assume that the CAP 'costs X', whereas they forget that in its absence there would be years when prices went sky high as a result of shortages.
I don't think its a coincidence that in the last few years since the CAP has decoupled agricultural subsidies from production (and thus opened the price of produce to be set by world trade prices) that we have seen such violent moves in food prices. In the previous decades food expenditure had been dropping steadily as a percentage of average earnings. In the last few years it has risen slightly, not massively but risen none the less.
The CAP could be abolished tomorrow, and yes food would be cheaper. Not massively so, as I suspect the supermarkets would take a fair chunk of the lower prices, but lower definitely. However systemic risk would have risen as a result. As we have seen in the financial world, ignoring increased risks is a dodgy business. The consequences of a perfect storm of (say) bad weather in several of the major food producing regions reducing global production would hit us hard if we had little native production to rely on, instead just importing food. Our urban based lifestyles are not suited to empty shelves in supermarkets. Just because we have never experienced them does not mean they cannot occur.
I think I saw the suggestion of auctioning out planning permission on greenfield land on this blog a while ago. An interesting idea would be to use these proceeds to preserve farmland elsewhere. With the current price differential between farmland and housing property, I wouldn't be surprised if an entreprenourial contractor could even offer to "make" an acre of grade 1 farmland out of other lesser qualities land elsewhere, for each acre of similar grade farmland used for development. I know it's quite far fetched(grade 1 soil isn't ipads), but who knows what market innovation could bring...
S, Ed S has outlined how farmers were protected against very low prices in the 'good' years, and it seems to have worked; the next question is, how do we protect consumers again very high prices in the 'bad' years?
The latest variant of CAP is more or less negative LVT and thus abhorrent, and as you point out, does not dampen price swings. I suppose the key would be to sign farmers up to a long term scheme where they get an extra £10 per tonne in the 'good' years, but hand over £10 per tonne in the 'bad' years or something.
Or we could just pool LVT receipts from ag land (being a market average of expected future surpluses and deficits), put it to one side and drip it back out to farmers again when prices are low and back to consumers when prices are high.
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Anon, that is possibly a genius idea.
In some areas, the value uplift per acre when you get planning is £1 million (as Sobers will testify), for that much money, surely you can demolish a dozen empty houses, dig up the roads, cart off the reclaimed materials for use on the new site and bung down some top soil and have plenty of change left over from £1 million.
For £1 million there is pretty much no limits to what can be done. Other ideas could be to subsidise agricultural improvements, irrigation schemes, shelter belts, drainage, and whatnot (ofcourse then you would be out in arbitrary political terrain again, but whatever), with the outcomes far surpassing the productive capacity of that one acre removed from production.
I beg to differ re self sufficiency in the UK. Maybe 20 or 30 years ago some but these days it would take an awful lot more than most people think even if "we really had to".
Anon: "of course then you would be out in arbitrary political terrain again"
Well, that's where we started isn't it? Spending £100,000s to reinstate one acre of ag land worth £10,000 or so is a colossal waste of money that we'd only do to shut up the NIMBYs, Greenies etc. Political genius, economically it's nonsense of course.
SO, care to explain? We've got all them GM crops nowadays and all sorts. And yes, we'd have to accept a more boring diet, that's a given.
I think Anon's suggestions highlights another fallacy in the anti-development argument. Namely that green-belt and open fields of farmland are "natural" and "undeveloped". In reality most countryside in England is as "natural" as a housing estate.
Just look at the number of working farms, the number of people prepared to work them (including farmers offspring, the number of cows etc. The numbers have been falling for years (although per/cow milk production has been increasing at the same time and as you say GM crops and modern techniques/machinery all help higher yields), but we would have to increase the national herd by a third (made-up figure) and revamp thousands of sold/abandoned/rotting farm buildings etc to be self sufficient again.
DNA, of course it's a lie, but the NIMBYs' will use any foul excuse to reduce the amount of new construction.
SO, in terms of labour inputs, UK agriculture is hyper-efficient, it's about one per cent of the working age population growing enough food for all of us. In terms of land inputs, it is much more productive than it was fifty years ago, but we could increase output/acre by 50% or so by increasing the number of farm workers by 50%.
Unless there is freak weather, disease etc, the UK could easily feed itself 100%. And if there is freak weather, disease we'll have to import food or starve anyway.
This is pretty much a non-argument, because the main ag areas are nowhere near the main housing areas.
Why would you set up a pig farm* somewhere like Wokingham where your staff will need higher wages to work, and land will cost more, the cost of the slaughterhouse land will cost more and so on? You don't. You set up somewhere like mid-Wiltshire (around Melksham) and transport the "finished" goods.
*and I'm not talking about some organic rare breeds cottage industry, but industrial levels of food.
JT: That's true today, but in relations to soil quality and arable land, historically cities grew up around fertile areas. So the most fertile arable land are in fact near the most populous areas in almost all of the "old world" (almost the reverse is true in America, since ag and major infrastructure such as railroads was developed simultaineously), and hence the best soils are most likely to be developed. While technology is indeed more relevant to yields than natural fertility today, the fact remains (I still argue that from an economic point of view, greenfield land should be developed).
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