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March 24, 2005

SUPPORT OUR NON-FARMERS

Elections are nigh, and it follows as surely as night does day that the likes of the National Farmers' Union will be urging politicians to "support our farmers" in exchange for union votes. Of course, people (including politicians) should be free to support British farming -- or Bangladeshi farming, if they so choose -- with their own money. But any non-farmer should object to what "supporting our farmers" means in the political sphere: subsidies and trade barriers. Or, put differently, taking your money and telling you what to do.

Few question whether subsidies and import restrictions are, in fact, supporting farmers in anything but the most immediate, short-term sense. Were these to be scrapped, would British farmers starve or be forced to find a new line of work? Perhaps, but there's also plenty of evidence suggesting otherwise. When tariffs and subsidies were largely scrapped in New Zealand in the 1980s, the farming industry had no choice but to become more efficient to survive -- and this is exactly what they did. The total amount of farming activity dropped by a fraction of a percent -- and, not coincidentally, the number of smaller, family-owned farms rose.

However, if it is true that British farmers are absolutely dependent on such government measures to survive, would such measures be justified? No. Subsidies involve taking money from people and tariffs make the price of food artificially high. Both of these mean that we have less money to spend on other things we want. In the case of tariffs, the burden falls disproportionately on the pooor, who spend a higher proportion of their incomes on food than wealthier people do.

There is no good reason why the interests of a few farmers should take precedence over those of tens of millions of people -- but this is exactly what "supporting our farmers" adds up to.

There is another group of poor people who are losing out because of European protectionism: third world farmers. New crops are being developed which can grow in the often-hostile soil in the third world. Yet farmers in these countries -- who are often desperately poor -- are denied an opportunity to sell their produce on wealthy Western markets because of trade barriers and subsidies.

"I agree with all that", one might object, "but shouldn't Britain be self-sufficient with food?" The answer is that it does not matter. Nobody applies the same argument to smaller geographical units. If I were to argue that the county of Norfolk should wall itself and become "self-sufficient", or that half of London should be bulldozed and turned into farmland for the same reason, you would rightly laugh at me. On an even smaller scale, very few people live their lives as if self-sufficiency is the supreme virtue. Rarely do people grow all their own food, purify their own water, and generate their own electricity. Farmers do not typically manufacture their own tractors, either. The reason is obvious: "dependence" -- specialisation of labour, or everyone doing what they do most efficiently -- is a good thing. Indeed, that is one of the primary reasons the West has such high living standards. The advantages of specialisation do not change just because products cross international boundaries.

Finally, it is often asserted (especially in the wake of the recent Sudan-1 non-disaster) that food produced in other countries is of vastly inferior quality compared to British-produced food, and so the public needs to be protected from it. Whether this is true or not is doubtful. A government enforced national monopoly on the production of food (which is more or less what "supporting our farmers" means in practice) is just as likely to yield poor quality food. Those importing food also have an incentive to make sure only high-quality produce is brought into the country.

If consumers are not too stupid to know their own interests -- even enough to tell the difference between good food and bad food -- they should be allowed to decide for themselves. They might even willing to accept to accept some quality deterioration if it means lower prices. The government has no reason or right to decide such things for them.

Posted by Lewis at March 24, 2005 12:29 PM