« Douglas Carswell MP: Culture, Media and another holiday | Main | Tony Baldry and John Redwood wonder why the Labour benches are empty for the first backbench contribution to the Queen's Speech debate »

Martin Callanan MEP: A strange tale of booze, fags and subsidies

Martin_callanan Martin Callanan, Conservative MEP for the North East, describes the ongoing stupidity of some of the EU's agricultural subsidies.

Conservatives tend to be free marketeers - or at least British Conservatives do. We champion competition and argue the case for reform, especially in the European Union. But when it comes to agriculture, our party has frequently sacrificed its history of economic liberalism at the altar of the Common Agricultural Policy, which consumes 43% of the entire EU budget.

Conservatives have never been entirely comfortable with the CAP. However, for many years we feared that criticising the CAP would undermine the party's significant support base among farmers and in rural communities. This fear has now largely dissipated, partly because we overestimated farmers' affection for the CAP - if not for the EU - but also because the inherent efficiency and enterprise of British agriculture has shown unequivocally that the CAP is a failed policy.

Apart from the sheer waste of these handouts, the hypocrisy is staggering. For example, tobacco subsidies in the EU amount to £200 million a year. Southern European farmers get paid to produce tobacco, which is of such poor quality that very little is bought by European tobacco companies who prefer the superior American variety. This surplus tobacco is then dumped on poor third world countries where smoking is aggressively marketed and health services lack resources to treat smoking-related illnesses. Meanwhile, the EU is paying PR companies millions more to run sophisticated viral advertising campaigns as part of a zealous anti-smoking crusade. I might also mention that the European Parliament has just rescinded a total smoking ban on its premises.

The situation with wine subsidies is even worse. Wine makers, again, mostly in southern Europe, will trouser almost a quarter of a billion pounds of taxpayers' money next year. Much of the wine they make is of poor quality and will never reach a market that has long since warmed to the more consistent and better promoted wines of the New World. So the European Commisson then pays hundreds of millions more annually to buy up the this undrinkable plonk and turn it into into industrial products like paintstripper.

Meanwhile, British wine production is thriving in the free market, well away from the subsidies regime. More land is under cultivation for wine in the UK than since the reign of Henry II, some 800 years ago. But EU regulation could yet scupper this thriving subsidy-free industry. Britain is fast approaching a production ceiling of 25,000 hectolitres a year. Once this ceiling is breached, British wine growers will be banned, under EU law, from planting any more vines. So the EU - supposedly so committed to competition and free markets - will punish Britain's thriving wine industry for doing so well outside the handouts system, yet will reward the subsidy addicts in southern Europe for producing wine that no-one wants to drink! The latest barmy commission plan is to dole out yet more cash to 'grub up' those un-productive vines in Southern Europe.

In the long run, I am at least comforted by the fact that the system of wine subsidies - and farm subsidies in general - is unsustainable. As in so many other areas of economic policy, the EU's efforts to insulate itself from the vigour of the free market are doomed to failure. The longer the EU waits to adapt, the more painful that adaptation will be. But British farmers and British taxpayers should not be forced to suffer the consequences of such nonsensical and mutually contradictory policies.


TrackBack URL for this entry:

Listed below are links to weblogs that reference Martin Callanan MEP: A strange tale of booze, fags and subsidies:


You must be logged in using Intense Debate, Wordpress, Twitter or Facebook to comment.