So I thought I'd try and write something. You might agree with it - you might not. My "win condition" is that you reach the end of this post with a nagging doubt. Maybe the leave campaign might not be all bad... maybe they're not all frothing loons.
Caveats - this is going to be fair, but not unbiased. I'm writing this from a pro-leave perspective, but an honest one. Also - do not post links to politicians in the comments. If I wanted to listen to them I'd turn the news on.
As a rule of thumb, poverty is bad and I oppose it. Not the relative poverty we talk about in the UK, of xx% percent of some average income. That's not poverty, that's being in the top 20% of the worlds population. I'm talking real poverty - the 2$/day grinding poverty that has been humanities base state for most of it's existence. Subsistence farming for the most part.
What's this got to do with the EU? Well, a third of the EU's money goes towards maintaining global poverty. It doesn't do this very effectively, nor is it a primary objective. But that's what it does.
That's... a bit of a leap. Once more, with workings? Sure.
So. About one third of the EU's budget goes towards the common agricultural policy, or CAP. It used to be more, but over the years it's dropped from about two thirds, as the EU has expanded. What is this CAP I speak? It's a huge set of interlinked tariffs, subsidies and rules which the EU has being saying it's going to reform any day now for as long as I can remember.
Lets look at the case of sugar. Let's use EU statistics, because using the numbers of your enemy is big and clever. Ahh, lets use these. We're going to use the "EU market price for white sugar" graph, in euros per ton. So note that these prices are vulnerable to currency fluctuations. Because of this we're only going to use the two lines denominated in euros/ton - because dollar fluctuations make things more complicated for all our purposes.
Go look at the graph. No, seriously - you really need to. On the "dashboard" page it's the top right one. Fine, here's a copy:
Lets start with the obvious. Ignoring the black dotted line (which is just the same as the black line but in dollars) what do we see? First, apart from for a few months the price difference between the EU and the rest of the world has been at least 100 euros. Usually it's been a multiple of hundreds of euros per ton. Currently it's only ~50 per ton, but that's quite uncommon.
The EU is paying a higher price for sugar than the rest of the world. That means that every single user of sugar in the EU is paying more than they need to. Currently around 10% more, but historically up to 300% more than world price. That's a heck of a lot of money there - where does it go? Get to that in a second.
So why don't the sugar producing nations sell to the EU and make a mint? They'd love to. Except that there are tariffs. Yep, that's right. The EU will charge you for the privilege of importing sugar*. The EU - keeping prices high for it's members since it's formation. This keeps the market price high, which benefits...
Ah, who does all this benefit? That's right - the farmers and producers of the EU. All these market distortions significantly benefit the sugar farmers of the EU. Entirely co-incidentally, the EU is the worlds largest sugar beet grower. Which came first? I don't care, to be honest. Either way, it's a huge waste of money.
So we've established that the EU members all have a higher price, making life that bit more expensive. But you say I was talking about a third of the EU budget. Well, the CAP accounts for a third of the EU budget. It's nowhere near that expensive to enforce tariffs - so where does it go? Subsidies.
We pay our farmers for all sorts of things. With sugar, the EU mandates that all sugar produced as part of an EU farming quota should be paid a minimum price for sugar beet. We also pay farmers money for a host of other things. Here's the Guardian as an example. Critically we pay per acre. Own farm land, get a payment. There's payments and allowances for all sorts of things. Critically, it goes to farmers and landowners.
But how does this hurt the cause of World Poverty? Well, if we didn't subsidize our own farmers, who would grow sugar? Well, it wouldn't be us. But you remember the * above? It's the poorer nations of the world. Proof of this? From an EU site:
Since the reform of the sugar market regime, the EU has become a net importer of sugar. Imports are mainly in the form of cane sugar for refining, from the African, Caribbean and Pacific states (ACP) and Least Developed Countries (LDC) which benefit from quota-free, duty-free access to the EU market.So since 2009 the EU has made a start in reversing some of the damage they've been doing. For 16 years we/they deliberately prevented the world's poor countries from selling to us.
Of course, this is for sugar. I'm not an expert, and I've simplified the subject. There have been improvements and small reforms over the years. But we still have the situation where we
- Tax the people
- To subsidises farmers
- Who sell at an inflated price
- Caused by a tarrif structure that hurts the poor sugar producing nations of the world
- Causing everyone in the EU to pay more for sugar and all related products.
Now, if it was just sugar I'd shrug. There's a few other CAP goods... ok, it's pretty much every agricultural good I can think of.
- cereal, rice, potatoes
- oil
- dried fodder
- milk and milk products, wine, honey
- beef and veal, poultry meat and eggs, pig meat, sheep / lamb meat and goat meat
- sugar
- fruit and vegetables
- cotton
- peas, field beans
- sweet lupins
- olives
- Flax seeds
- Flax fibres
- silkworms
- hemp
- tobacco
- hops
- seeds
- flowers and live plants
- animal feed stuffs
The first step on the climb out of poverty for any nation in the modern world is easy. Find someone to buy your stuff.
While we are in the EU we are directly paying for a system that harms the world's poor. If we leave it, we can just buy their stuff. We go from causing active harm to helping the worlds poor.
No donations, no aid, no corruption. Honest pay for an honest product. Oh, and we'll save money on food while we're at it.
PS: If we want to subsidize farms, to ensure we keep internal agriculture going that's an option. But we do that while being open and honest about what we're doing. We freely and openly accept and admit that we're screwing the third world in the process. But we can do it in less market distorting ways.
PPS: Note that there's been no actual policies proposed to reform this. But this is almost certainly because all the parties are campaigning to leave. Serious policies on the "So what now" are essentially impossible till we know what the final conditions are on leaving.
