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post #1 of 68 (permalink) Old November 24th, 2005, 21:39 Thread Starter
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Euro subsidies

Since we have enough US bashing.

Lets bash the euros for their ridiculus subsidies which are 3 times bigger then the US ones, that are crippling third world economys in agriculutre.

All thier actual aid to africa doesnt even come close to what subsidy's cost them. I know that the US gave $10 million in aid in 2003 to Burkina Faso, and yet US subsidys cost Burkin Faso $13.4 million, and since the US subsidies alot less then the EU

how much is unfair trade by the EU hurting developing economys and holding them back? anyone have any good numbers or studys.

Also subsidy's are really inefficent from any economic standpoint, why are they so widely practiced....and i mean apart from votes, cause im sure more people are not farmers and would prefer cheaper prices in the market place, and thier taxes going to a better cause.

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post #2 of 68 (permalink) Old November 24th, 2005, 23:02
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That's why today an mportant decision was made that takes a first step in reforming the subsidies of sugar production..

At the time that it was installed, the EU agricultural policy, thought of by Sicco Mansholt, had very good reasons to be as they were. Still, the system ate itself 'causing enormous environmental and social problems today. Therefore it has to be reformed, still this (has to) happens slowly. A social bloodbath in the farmer community shouldn't be the aim.

BTW for people who speak Dutch, 'De graanrepubliek' by Frank Westerman is an incredibly interesting and well written book on this issue.

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post #3 of 68 (permalink) Old November 24th, 2005, 23:20
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At the time that it was installed, the EU agricultural policy, thought of by Sicco Mansholt, had very good reasons to be as they were.
Stop kidding yourself. There were no good reasons whatsoever.

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post #4 of 68 (permalink) Old November 24th, 2005, 23:24
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And I renamed the thread, as I couldn't stand it the way it was.

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post #5 of 68 (permalink) Old November 25th, 2005, 01:29 Thread Starter
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did i spell something wrong

in any case im with bastin on this one

and i dont wanna be in sig....this is off the record

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post #6 of 68 (permalink) Old November 25th, 2005, 01:52
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Originally Posted by Bastin
Stop kidding yourself. There were no good reasons whatsoever.
He's not kidding himself. He's kidding us - gotta keep up the facade about caring for the little "dummies" with nothing, don'tcha know.

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post #7 of 68 (permalink) Old November 25th, 2005, 06:12
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any expert in boxes ?(green,amber, and blue) . I still dont understand what exactly is a blue box. According to defenition it is amber box but with some conditions on it.
Defenition of blue box
Any support that would normally be in the amber box, is placed in the blue box if the support also requires farmers to limit production. The main cause of concern for the developing countries (and so for india) is this blue box. Since there is no blue traffic signal it is more difficult to understand.

Any way EU has said that they wont make further comprimise on the issue and will push other issues related to them other than agriculture, and at the same time the G23 and the african union has once again said that unless the agricultural issue is resolved they wont allow any other issue to be discussed. (Interesting days ahead).

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banana - APC - carrebians (spelling ?) (mainly dominica republic) - against 3 american companies
agricultural products - Asia and south america. (led by india and brazil) - agaisnt EU and US to a lesser amount.
cotton - Africa and agricultural products to an extend (most north ,central african states)
- Against EU and US to a lesser amount.


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post #8 of 68 (permalink) Old November 25th, 2005, 16:54
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The EU farm subsidies are a joke, but so too are the US farm subsidies, both seek to create an artificial market at the expense of the Third World. Without these subsidies and an open market, there will be no need for aid to other countries.

In addition to subsidies we have quota systems in both the EU and the US. The US imposed quotas on European steel imports,

This is all done to support the domestic economy, but is it a false econmy. The result is that consumers pay more and the tax payer pays more tax to subsidie the farmers and give aid to the thrid world that cannot sell its products becasue they are too expensive.
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post #9 of 68 (permalink) Old November 25th, 2005, 18:15
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without subsidies and market protection local workers would lose jobs, so I don´t see as an issue EU/US making restrictions. One can say that in the end the consumer is the one that loses with subsidies, I don´t see it that way as through them is a way to keep certain segments prosperous creating jobs.

What I do have a big grip about it is certain countries pushing freemarket over developing countries as their only way out. Although some would be better of since a free market would make a country grow independent of political screwups, corrupt governaments, Plus foreign investments would grow modernizing the industries.
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post #10 of 68 (permalink) Old November 25th, 2005, 18:47
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Quote:
Originally Posted by Lite®nit
without subsidies and market protection local workers would lose jobs, so I don´t see as an issue EU/US making restrictions.
They would only lose jobs if they're doing it inefficiently. After New Zealand dropped most agricultural barriers, their farmers became more efficient, managed their livestock and crops more cost-effectively, and have thrived. Now, NZ is a major agricultural exporter, 10% of the workforce is in agriculture, and food prices there are very low, despite geographic isolation. Contrast that with protectionist barriers, which prohibit imports, thus decreasing the incentive to modernise and economise, and causing low living standards, slow growth, and high unemployment.
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One can say that in the end the consumer is the one that loses with subsidies, I don´t see it that way as through them is a way to keep certain segments prosperous creating jobs.
It doesn't create jobs. It increases the cost of food and increases taxes. As a result, it increases cost of living for everyone, forcing up wage requirements, and destroying jobs across the economy. It also decreases the effective workforce by tying labour to the land. Hence, whilst efficiency is decreased (by reducing employers' choice), wages are increased, destroying yet more jobs.

Furthermore, creating jobs for the sake of it isn't worthwhile. In successful economies, unemployment is usually low (lower than 5% usually leads to a labour shortage). The USA has unemployment of 5%, the UK 4.7%, and Japan 4.2%. The UK needs more workers, and, yet, much of it is paid to do very little, just because it does very little in the countryside. In certain prefectures of Japan, 1.7 job offers are made per applicant, yet they have over three million labourers doing something that isn't worthwhile.
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What I do have a big grip about it is certain countries pushing freemarket over developing countries as their only way out.
Free markets are better. Economic fact. If countries refuse to help themselves by adopting the best practice, we shouldn't help them to dig wells and fight malaria.

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post #11 of 68 (permalink) Old November 25th, 2005, 19:06 Thread Starter
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i will raise hte point my economics professor did

subsidies and claims that it keeps people emplyed make as much sense as it does hiring the unemployed to dig holes and then fill them up

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post #12 of 68 (permalink) Old November 25th, 2005, 19:19
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subsidies and claims that it keeps people emplyed make as much sense as it does hiring the unemployed to dig holes and then fill them up
Correct. Doing it solely to keep people employed is an example of the Broken Window fallacy. It misses the opportunity costs that are expended employing labour in an inefficient position.

Then, the consequent lack of labour to meet the aggregate demand causes inflation, and also leads to calls for immigration, leading to numerous social problems.

Of course, they're not subsidised solely to keep them employed, but other (German School) arguments that the French government uses to justify the CAP are also nonsensical.

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post #13 of 68 (permalink) Old November 25th, 2005, 22:56
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While I see your point, that is not the common perception in Norway. Our farmers get twice as much aid as the EU farmers. The soil for farming is not as good here, and without subsidies experts claim that nearly all Norwegian farms would go bankrupt. We would end up not being able to produce our own food. Apart from this leaving us completely at the mercy of other nations, putting us in a really bad spot should there be a huge emergency of some sort, in the extreme it would also deprive Norwegians of plenty of Norwegian products that most of us consider important. You might say that if there is a market for it, then people would always buy it. But if for example the Norwegian brown cheese, which I eat frequently, was three-four times as expencive, I would not be able to afford buying it anymore.

Had we not had this farming situation, I can guarantee that Norway would have been part of the EU. However, the farmers have gone against Norway joining what was the EEC in 1972, the EC in 1994, and do not want to join the EU now. In both elections, the no side won with a slight majority.
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post #14 of 68 (permalink) Old November 25th, 2005, 23:04
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Maybe...or maybe the no one's coming up with solutions to make agricultural production of those "important products" possible and feasible (there's a lot of technology out there today, maybe some of it can help?) and just taking the easy way out and yelling for help. Btw if subsidies are cut than taxes can be cut, leaving you with more disposable income to spend on those products which will become more expensive (whether the increase in your income balances out the increase in prices is debatable though).

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Then, the consequent lack of labour to meet the aggregate demand causes inflation, and also leads to calls for immigration, leading to numerous social problems.
You said in another thread (the French riots one, I think) that W. Europe does not need immigrants at all. Care to elaborate? Is labour tied up in the agricultural sector a major factor in that equation, i.e. if the labour "tied up" in agriculture would move to other sectors, that there would be significantly less need for immigrants to fill jobs in those other sectors in W. Europe?
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post #15 of 68 (permalink) Old November 26th, 2005, 00:35 Thread Starter
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as was pointed out, if the subsidies are cut then you pay less taxes, and in effect get more money to either purchase the more expensive cheese, or the taxes can be put to a use that will generate value, or increase social surplus (infrastructure, money for education, etc)

the fact is the farmers have no incentive to produce at lower costs or find alternative methods of production purely because they know they have no need to, cause the govt will bail them out. So not only does it hurt progress but also a shite load of third world countries

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post #16 of 68 (permalink) Old November 26th, 2005, 01:03
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Originally Posted by Orange
While I see your point, that is not the common perception in Norway. Our farmers get twice as much aid as the EU farmers. The soil for farming is not as good here, and without subsidies experts claim that nearly all Norwegian farms would go bankrupt. We would end up not being able to produce our own food. Apart from this leaving us completely at the mercy of other nations, putting us in a really bad spot should there be a huge emergency of some sort, in the extreme it would also deprive Norwegians of plenty of Norwegian products that most of us consider important. You might say that if there is a market for it, then people would always buy it. But if for example the Norwegian brown cheese, which I eat frequently, was three-four times as expencive, I would not be able to afford buying it anymore.

Had we not had this farming situation, I can guarantee that Norway would have been part of the EU. However, the farmers have gone against Norway joining what was the EEC in 1972, the EC in 1994, and do not want to join the EU now. In both elections, the no side won with a slight majority.
The challenge isn't just finding more efficient ways to farm so that you can compete with farmers from outside your own borders, but maybe perhaps find a better way to use that soil that, per your admission, may just not be best suited for farming.

Subsidies don't just hurt local economies because it inflates goods and shortens vital monies from circulating. The biggest problem with subsidies is that it keeps a poor industry in business at the cost of possibly numerous ventures with greater potential. That is, if Norway can not produce farm goods because it is disadvantaged for whatever reason, it should simply stop trying. Instead, use those resources that make farming inefficient and find something else where it can perhaps maximize it.

Perhaps rather than farming, Norway should manufacture farming equipment. Whatever. The point is, it does no one any good to keep a business a-float that can not compete in the normal market place. At least not in the long run.

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post #17 of 68 (permalink) Old November 26th, 2005, 01:10
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Orange

as was pointed out, if the subsidies are cut then you pay less taxes, and in effect get more money to either purchase the more expensive cheese, or the taxes can be put to a use that will generate value, or increase social surplus (infrastructure, money for education, etc)

the fact is the farmers have no incentive to produce at lower costs or find alternative methods of production purely because they know they have no need to, cause the govt will bail them out. So not only does it hurt progress but also a shite load of third world countries
I'm no economist, but in no way would cutting the subsidies to the Norwegian farmers give me a significantly better economy (unless they replaced it with a education reform, giving students biggers scholarships and loans). However, it would mean that most of those farmers would go broke, and an important part of our cultural heritage and our self sustaining ability would be forever lost.

If you consider it in a purely economical way, then if the subsidies were cut, Norway would have to import all our food, which would be putting money out of the country instead of into it. That way there would be less money circling around, and potentially more unemployment (all the farmers would lose their jobs). How could this be a good thing for us?
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post #18 of 68 (permalink) Old November 26th, 2005, 01:18
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I'm no economist, but in no way would cutting the subsidies to the Norwegian farmers give me a significantly better economy (unless they replaced it with a education reform, giving students biggers scholarships and loans). However, it would mean that most of those farmers would go broke, and an important part of our cultural heritage and our self sustaining ability would be forever lost.

If you consider it in a purely economical way, then if the subsidies were cut, Norway would have to import all our food, which would be putting money out of the country instead of into it. That way there would be less money circling around, and potentially more unemployment (all the farmers would lose their jobs). How could this be a good thing for us?
Typical, short-sighted answer.

What good is it putting money into your economy if the inflation it causes makes it worthless?

I think we can agree that food is an essential for us all. Now imagine paying $7 for an apple where $3 would do if not for subsidies. How does shortening $4 from the economy for every apple bought keep money in your country?

Apparently, you're no mathematician either.

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post #19 of 68 (permalink) Old November 26th, 2005, 01:31
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Originally Posted by Pila
The challenge isn't just finding more efficient ways to farm so that you can compete with farmers from outside your own borders, but maybe perhaps find a better way to use that soil that, per your admission, may just not be best suited for farming.

Subsidies don't just hurt local economies because it inflates goods and shortens vital monies from circulating. The biggest problem with subsidies is that it keeps a poor industry in business at the cost of possibly numerous ventures with greater potential. That is, if Norway can not produce farm goods because it is disadvantaged for whatever reason, it should simply stop trying. Instead, use those resources that make farming inefficient and find something else where it can perhaps maximize it.

Perhaps rather than farming, Norway should manufacture farming equipment. Whatever. The point is, it does no one any good to keep a business a-float that can not compete in the normal market place. At least not in the long run.
No it's not the best land for farming, but it's still important to keep our own farms for a number of reasons. Like I said in the previous posts; if Norway stop competing with farmers from other countries, by giving large subsidies to the farmers, then we will have a massive shut down of farms. That would mean that a large part of our cultural heritage would be lost, including a major part of our traditional food culture.

The fact that the farms use a lot of land should not be considered, since Norway is one of the biggest countries in Europe, with less than 5 million people living in it.

Norway is already a very successful country in international trade. We're big traders in oil, gas and fish among other things, and one of the richest countries in the world. We have low unemployment, a healthy economy, and a well working health system. Why then, from our perspective, should we destroy the Norwegian farms that provide us with so many important things, including the ability to support ourselves. Like I said in the previous post, it would also lead to a lot more importing of goods, which would mean more money travelling out of the country.
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post #20 of 68 (permalink) Old November 26th, 2005, 01:52
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What the heck kind of crop are you guys farming up there?

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