Editorial 55: Agricultural policy, costs fall and Georges Pompidou
While the government does not legislate regulations designed to stimulate production, some people are calling for more controls to prevent the arrival of non-EU farming products produced with a less restrictive regulations, and PAC subsidy policy does not take into account the income of its receptors, in the world has produced the collapse of the market price of raw materials from soybeans (20%), corn (12%), wheat (8%) and fuel (oil 60% and natural gas 15%).
The consequence of the cyclical repetition of these phenomena is the virtual disappearance of agricultural employment, which influences the employment increase in the service sector in many countries. This is demonstrated by Price Waterhouse Cooper report indicates that in 1960 the Spanish agricultural employment was 40.5% in 2012 is 4% and the Spanish service sector employment in 1960 was 29.2% and in 2012 is the 76.4%.
This situation produces not only serious changes in the nature, also introduces dangerous imbalances between countries and continents favoring more to large distribution structures that producer organizations without benefit to final consumers by the decrease in their buying power and pressure of taxes in the cost of commodities.
Consider the case of producers and consumers of agricultural and livestock products as they are the focus of interest for this publication. Producers are subject to an interventionist legislation that almost makes them citizens the edge of illegality, any method of work is as legislated it difficult for them to work effectively. While the same legislation helps them “apparently”, but apparently only because subsidies, which should aim to increase the income of producers to the difficulties of return derived from interventionism not arrive according to this objective. In fact 53% of Spanish producers received less than € 2,000 in 2013, while distribution companies, hunting grounds, companies that decided to cease production, if they can call semantically appropriate lawn care and so-called ” sofa producers” entered amounts ranging between € 300,000 and 7.3 million. If we consult the list of holders of major companies receiving subsidies from PAC, we find many names that can easily relate to the business groups that have frequent relations with the state (as it appears from a report by the EU Commission , statistics of Spanish agricultural guarantee fund and provincial business registers). We must also emphasize that poultry and pig farmers are negatively affected by the implementation of the CAP (2015-2020).
Regarding consumers we could think that, the decrease in costs and aids to producers, favors them, but the reality is that it is not for a significant stratum of society. The unpredictability of the price falls favors only speculative movements due to their volatility, and the increase in consumer prices from higher taxes, caused in most cases by the embezzlement of public money, has led to the loss of purchasing power to consumers in many countries. So that the difficulties of the real production sector have no impact on the consumer sector.
In this situation we should reclaim and update the active agricultural policies of President Georges Pompidou thought (1911-1974) aimed primarily at improving agricultural and livestock production technologies, the dimensioning of agricultural enterprises, price stability and improvement the living conditions of farmers and ranchers so that the population it is fixed to the territory and the increase in production had a direct impact on consumers, both for the quality of production proximity, such as price levels .