02 June 2008

Greens support European Common Agricultural Policy?

A bizarre new ideology is being pushed by the Greens - it's called variously "food democracy" or "food sovereignty" or "food security".

Sue Kedgley has spoken about this, with a combination of hysteria and banality that sends the mind boggling. Take a few quotes:

"food commodity markets have become a magnet for speculators and traders fleeing Wall street. Commodity speculators are pouring billions of dollars into commodities and grain futures –betting on the future of grain. They don’t actually buy or sell a physical commodity, like rice or wheat, but bet on its price movements. As food has been turned into a distant tradable commodity, a form of capital, to be traded and speculated upon, grain prices have soared, putting food stocks further out of poor peoples reach. "

So it's new that food is a tradable (sic) commodity. Not only that she thinks futures are a "bet" over nothing, when they are trading a contract to trade a commodity. A stupid neo-leftwing misinterpretation of what all those "rich folk" do, like the notion that share trading is about nothing at all -when it is about owning businesses.

She goes on with the typical "big bad corporation" vs "poor little country" nonsense saying "So we have an extraordinary situation where agribusiness giants like Cargills and Monsanto are making record profits while countries like the Philippines and Bangladesh can not afford to buy the rice they need because prices are so high. " Well Sue, countries don't buy food, people do. Both the Philippines and Bangladesh have suffered due to price controls and trade restrictions by their own governments. You might note that the trade in rice is particularly heavily distorted because countries like India ban exports, and others like Japan virtually ban imports, restricting very efficient producers like Vietnam and Thailand from being able to increase production to meet global demand.

but Sue doesn't support free trade.

She loses the plot completely here "This brings me to another major underlying cause of the present crisis -- the so-called trade liberalisation agenda or theology that global institutions like the World Bank and the IMF –and of course our government --have been pursuing for decades, and forcing on developing countries." Why is this a cause of the crisis Sue, since trade liberalisation in agriculture has yet to seriously occur? Well...

"Free trade is based on the premise that food should be grown and produced wherever in the world it can be produced more cheaply. If another country can grow something more efficiently we will no longer grow it here because it is inefficient. " No Sue, is it based on the premise that producers and consumers should be free to choose what they sell and buy according to mutual voluntary interaction.

Then she really loses it "The WTO enforces this through global trade rules that require countries to open up their agricultural markets to global competition and forbid them from protecting them from cheap imports, as this is seen to distort or interfere with the mysterious workings of the free market". Well in case you didn't notice Sue, open trade in agriculture doesn't exist. The EU, Japan, USA and some developing countries are against it - so how are you blaming something that doesn't exist? What do you think the current round is all about? Complete nonsense, it's no wonder you find the free market mysterious, since you can't even identify when it doesn't exist.

"No one has ever been able to explain to me why the leading flag wavers for free trade, Europe and American, are allowed to continue to heavily subsidise their own farmers, while preventing other developing countries from subsidising their own" Um Sue, they are not the leading flag wavers for free trade, New Zealand and Australia are. There is no free trade in agriculture, and developing countries continue to subsidise and protect their own agriculture too. However, you're either stupid or making it up by now.

"The result is that dozens of developing countries that were once self sufficient have become huge importers of food, and now find themselves at the mercy of a global market and skyrocketing food prices." Well dozens is an exagerration, but the fault is not free trade Sue. It doesn't exist in agriculture you imbecile.

Then she quotes the Minister of one of the biggest offenders of all "The French Agriculture Minister Michel Barnier commented recently, that food is not simply a matter of trade and food cannot be left to the laws of the market alone, neither to financial speculators. “The answer to food insecurity is not brutal liberalisation of trade, but the development of agriculture all over the world and not only where it is profitable to produce it.”

Excuse me? So Sue Kedgley effectively supports the view of a man who defends European agricultural policies that shut out producers from NZ and developing countries from European markets, that subsidise European producers to NOT produce (hiking up prices), that subsidise European food producers and exports undermining producers in other countries. The Common Agricultural Policy is economic and environmental vandalism, but Kedgley is too stupidly attached to statist collectivist ideology to know better. She is effectively siding with the enemies of New Zealand farmers. Thanks Sue!

Then she starts being a bit creative with the facts "Many countries are now giving top priority to food security, increasing agricultural productivity and self sufficiency. The Philippines, which has been rationing rice, has announced its intention to move from being one of the worlds biggest importers of rice to being self sufficient within five years. " Actually Sue, it is not one of the best places for growing rice given its geography, but the high price is making it more economic. Much land is government held and is being set free, and very poor infrastructure (mainly roads - those evil roads) has been a reason for poor production.

Now it's make up facts time "Many countries are openly flouting WTO rules and are putting controls over food prices, exports and imports, introducing agricultural subsidies and creating food reserves –none of which is permitted under WTO. " She doesn't say what countries, and it is an out and out lie, since agriculture is not part of most countries commitments to the WTO. She ignores that price controls do nothing to encourage production or attract more imports. She's far too stupid to know that interfering with trade does far more to reduce supplies and increase prices than not doing so.

So she argues for a "national food security strategy", something she admits Jim Anderton says is loopy. Her Maoist type solution includes "We want all primary school children to be taught how to grow, harvest and prepare food. We want to grow edible trees in every school in New Zealand, and on parks and reserves as well. " See she'd rather your kids grew tomatoes than traded them, and she wants edible trees (!) growing in public places, and we can watch the fruits being plundered as soon as they emerge.

"We want to encourage a much greater uptake of fair trade food, so that when we buy imported food we know that we are supporting, not undermining, their local farmers." Or paying more for the same product, so we can buy less of other food. Why should there be "fair trade food" when prices are getting so high? Oh no, she can't link the two can she?

"We want to encourage a similar turning away from industrial, petroleum dependent food towards local food production. " In other words, LESS food production. That'll do wonders for prices then.

Sue Kedgley is dangerous. Dangerously stupid. She supports the obscene system of subsidies, protectionism and trade barriers that has exacerbated food production in developing countries, but more importantly has undermined the New Zealand economy for decades. She doesn't give a damn that this damages the economy, she thinks we can be self sufficient like North Korea. She advocates moving from efficient mass produced food to quaint locally produced high price, low production food. Nice for some, but it means some will starve, as there will be LESS food. She'll want price controls then, and that means there is even LESS incentive to produce.

The economic illiteracy is scary, this is from the same party that would rather Fonterra sell cheese, butter and milk well below market price than let farmers profit from the best dairy prices in ages. This foolishly forgets that if domestic prices were controlled, there would be shortages because what farmers would sell domestically if they could get more money exporting?

Food sovereignty, democracy, security, whatever term you wish, is a shroud for protectionism and statism. It is the notion that people don't know what is best for themselves, that the decisions of millions and millions of people aren't right, the idea that people should pay a lot more or less for something than what others are prepared to pay, or taxpayers should be forced to pay for production or consumption. It is the wishful thinking of arrogant planners who can't stand that the results of those millions of decisions means things aren't perfect for everyone, so think their little brains can change something and make it better.

High food prices are partly the fault of the biofuel fetish, driven by many environmentalists. That should end, at least in the sense that government subsidies or incentives should end for it. A bigger problem is how the subsidies and protectionism of the EU has stifled production elsewhere, how trade restrictions hinder production and the ability of farmers to benefit from high prices and respond to them, and the ability of consumers to source the best prices available.

Given Sue Kedgley doesn't understand futures trading, and doesn't even realise that trade in agricultural commodities doesn't come close to open and free trade, you can't expect much intelligence to come from her on these matters. In fact the nonsense she is spouting simply makes things worse.


adamsmith1922 said...

Whilst I am sure we do not agree on everything your post here echoes much of what I have been posting about for some weeks now, as to the real underlying causes of the food issue.

At my blog there is a page listing the majority of my posts on the issue for anyone interested.

Kedgley is truly dangerous and her assumption that protectionist zealots like Barnier have anyone's interests at heart other than his re-election and the lifestyle of French farmers subsidised by the consumers of the EU under the CAP is breathtaking in the enormity of her arrogant stupidity

Libertyscott said...

Excellent I'll have a look, she needs to be fought vehemently on this.