Friday, January 19, 2007

French Farm Subsidies

It seems that, even though French farmers receive the equivalent of $11.6 billion per year in government subsidies (under the EU's Common Agricultural Policy), 1) an average of 100 French farms have gone out of business every day for the last 50 years, 2) the number of French farm workers has dropped 2/3 in the last 25 years, 3) France’s farm exports have been declining by 3.4 percent per year since 1999, and 4) farm household income has actually fallen during the past decade, while the incomes of non-farm households in France have been going up.

Cato-at-Liberty suggests this may actually be because of the subsidies, which, qua subsidy, mitigate or remove the economic incentive for innovation that exists in a free-market situation. That is, since the French farms enjoy government hand outs and price protection, they have very little if any reason to innovate, become more efficient, become more competitive, etc. Lacking these advances, the long term outlook for French farms (or any such beneficiary) is actually degraded.

I find what follows next in the article likewise intriguing, but as pertaining to a slightly different issue:

"When the EU’s farm commissioner, Mariann Fischer Boel, warned that French farmers should seek second incomes outside the farm sector to survive, the French farm minister denounced her comments as “an insult to the social model to which European citizens are profoundly and legitimately attached.”

Is an agricultural “social model” that costs billions of euros a year and only adds to the decline of the French farm worth holding on to?"


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