Tuesday, April 28, 2009

European Union EU Common Agricultural Policy CAP Susbsidies also include Egregious Non-Farm Aid to Multinational Corporations

With reference to our previous posting on EU farm subsidies, we should point out that CAP payments made by the EU are not limited to farms and that European Union Common Agricultural Policy (CAP) susbsidies also include Non-Farm Aid to multinational corporations, for example, in the form of notorious so-called export refunds, which involve the transfer of billions of euros to the bank accounts of large food-related companies.

MDC Datum explains how export refunds work (see also CAOBISCO on this topic). In the first instance, prices, e.g. for sugar, are kept artificially higher in the European Union than what world prices would warrant, by implementing various means of "intervention" (this used to be called "price fixing"), thus already greatly benefitting the relevant companies in the first instance.

Then, when these same companies sell their (increasingly?) surplus production not to the EU, but on the world market, the EU by a system of so-called "export refunds" makes up the difference in price between the "world market price" and the fixed artifically-created "intervention price" which prevails in the European Union for the given commodity. This difference is paid to the exporting company! Now there is a game to be involved in. The European Union system of export refunds thus can be regarded as one of the greatest scams ever invented for the beneficiaries of this "sure thing" system.

As written by Felicity Lawrence at the The Guardian on December 8, 2005 in Multinationals, not farmers, reap biggest rewards in Britain's share of CAP payouts:

"[C]ampaign groups such as Oxfam argue that the CAP has given a handful of monopoly multinational companies fixed prices and guaranteed markets while encouraging excess production. Just six sugar traders, for example, control most of the EU sugar market and between them have been able to claim EU export subsidies amounting to between €1.2bn and €1.4bn annually. Surpluses can be dumped on international markets at subsidised rates and thus keep world prices artificially low, further benefiting the multinational companies. "Stripped to its essential, the sugar regime is a system of corporate welfare...[it] sanctions what is effectively a [legal] cartel", according to Oxfam." [link and emphasis added by LawPundit]

Read in this regard Oxfam's Briefing Paper 34 Milking the CAP: How Europe’s dairy regime is devastating livelihoods in the developing world, which observed in commenting on the year 2001 that :

"European citizens are supporting the dairy industry to the tune of €16 billion a year. This is equivalent to more than $2 per cow per day – half the world’s people live on less than this amount. EU surpluses of milk and milk products are dumped on world markets using costly export subsidies, which destroy people’s livelihoods in some of the world’s poorest countries. Dairy processing and trading companies are the direct beneficiaries of these subsidies. Meanwhile, many small-scale European dairy farmers are struggling to make ends meet. Oxfam is calling for an immediate end to EU dairy export dumping and for agricultural support to target small-scale farmers."

Although export refunds for dairy products were discontinued by the European Commission in 2007 in part because of the understandable swell of protest against these clear monopoly scams, it is now reported a mere two years later that export refunds for dairy products are again to be reinstituted, as we read in the European Parliament on March 12, 2009 in Strasbourg in the ANNEX (Written answers) - QUESTIONS TO THE COMMISSION:

"Question n° 56 de Alain Hutchinson (H-0122/09 )
Objet: Subventions à l'exportation
H-0122/09

En 2001, l'UE s'était engagée à diminuer progressivement les subventions à l'exportation de ses produits agricoles, pour les supprimer d'ici à 2013. Cependant pour 2006-2007, l'UE a encore dépensé 2,5 milliards d'euros en subventions à l'exportation. Si ce montant représente une diminution, il demeure encore beaucoup trop élevé. Dans un contexte international marqué par la crise alimentaire et la flambée des prix agricoles, il serait pourtant nécessaire d'avancer beaucoup plus rapidement vers la suppression de telles subventions qui constituent un dumping intenable pour des millions de petits producteurs des pays en développement.

La Commission peut-elle préciser, chiffres et calendrier à l'appui, quelles sont ses intentions en la matière?

The re-introduction of EC export refunds for dairy products is a response to a dramatic 60% decrease in world market prices over recent months, a result from shrinking demand. And contrary to the current situation in the EU, dairy production increases in certain competing exporting third countries such as New Zealand, Brazil and the United States.

These export refunds have therefore to be considered as a safety-net and certainly not as a setback of the course set out in the 2003 Common Agricultural Policy reform and the subsequent Health Check.

The EU has always respected its international commitments on export refunds and will continue to do so.

The Ministerial Declaration adopted at the Hong Kong World Trade Organisation (WTO) Ministerial Conference on 13-18 December 2005 lays down that: "We agree to ensure the parallel elimination of all forms of export subsidies and disciplines on all export measures with equivalent effect to be completed by the end of 2013." The EC as WTO member will respect its political commitments in the declaration, including on the deadline for the elimination of all forms of export subsidies. This commitment however is conditioned on the successful completion of the Doha Round.

The EC remains committed to concluding the Doha Round and hope that an agreement can be achieved during 2009. Following an agreement the EC will specify in its schedule the details on the elimination of export refunds by 2013."

In 2006/2007 the EC notified to the WTO the spending of €1.4 billion in export refunds and not € 2.5 billion. This is less than one fifth of the agreed WTO ceiling for export subsidies."

According to the Farmers Guardian, the following non-farm CAP payments were e.g. made in 2004/2005 (the very fact that these numbers are not up to date anywhere online indicates that people are trying to hide what is at heart a tremendous scam system, benefitting only large vested interests):

"1. Tate & Lyle Europe £88,703,757.25
2. C Czarnikow Sugar £39,396,794.72
3. Tate & Lyle Europe £20,104,840.01
4. Fayrefield Foods Ireland £18,361,816.61
5. Tate & Lyle Citric Acid £15,243,922.59
6. Philpot Dairy Products £13,229,777.84
7. Meadow Foods £12,471,426.15
8. Milk Supplies £9,775,832.61
9. Dale Farm £8,616,911.24
10. Nestle UK £5,116,853.67
11. Meadow Foods £4,909,609.00
12. G's Growers £4,593,443.86
13. T M C dairies £3,100,963.74
14. Lakeland Dairies £2,938,066.39
15. KG Growers £2,380,753.40
16. Express Dairies Milk £2,270,698.41
17. Eilers & Wheeler Sales £2,149,003.87
18. Fruition APO £1,664,004.76
19. Humber Growers £1,644,222.60
20. Cargill plc Agricultural Division £1,478,833.50"

It is no wonder that the WTO has put pressure on the European Union to abandon these export refunds which are not only skewing world prices, but are also wrongfully filling the coffers of various EU multinational companies and their wealthy shareholders at EU taxpayer expense, taxpayers who not only are being forced to pay higher than world prices for the commodities that they themselves consume, but who in addition are also forced to pay to subsidize EU companies who are selling surplus commodities to the 3rd world nations at subsidized prices, thus undercutting 3rd world economies. It is a new "colonial-type" racket of immense scope.

What is particularly disturbing about CAP subsidies is that they are going straight out of the pockets of ordinary citizens into the pockets of large companies and landholders. This is nothing more than a modern form of feudalism as far as the paying EU taxpayer is concerned.

Both the UK and Germany, for example, pay more into the CAP pot than they get back, so that their ordinary citizens have every right to demand that this money go at least to deserving farmers either at home or in some of the other developing EU Member States. It is most surely not the intent of the EU populace to see their hard-earned monies being continuously plundered by wealthy institutions and individuals who already have more than enough.

There is also no excuse (according to 2006 stats at FarmSubsidy.Org) for large countries such as France WINNING €22 more per citizen per year in CAP subsidies than they put into the pot, whereas each citizen in the United Kingdom LOSES €22 in the deal, and in Germany each citizen even loses €42 in the deal. In 2007, according to FarmSubsidy.Org, the top three CAP recipients in France were BANKS! Why should citizens in the UK and Germany be subsidizing French banks, agribusiness and large multinational corporations?

Once again, we point a strong finger of guilt at all of those knowingly involved in this unprecedented and often clandestine scheme for the redistribution of money within the European Union. The very fact that information about CAP subsidy payments is extremely hard to obtain indicates clearly that those in the know also know that they are in the middle of operations which should best not see the light of day.

Jack Thurston at FarmSubsidy.Org refers to a Financial Times article on CAP by Alan Beattie, who tellingly wrote:

"People pushing for reform of the CAP say more pressure from inside the EU is needed. But the first problem is finding detailed information. For much of its history, the CAP has largely operated in the dark. Figures on how much each farmer receives have had to be painfully extracted from EU member governments by sustained campaigning and repeated requests under various national freedom of information acts."

We see this again clearly in Germany's reluctance this week to abide by EU law and to disclose the names of CAP recipients in the year 2009.

WHERE IS there evidence of the PROGRESS FORWARD so badly needed by the EU?

European Union Farm Subsidies of $55 Billion are 43% of EU Budget : Germany Refuses to Name Aid Recipients on Data Protection Grounds

Feudalism is alive and well in Europe. It just has a very modern form of expression.

The really big money in the European Union financial scheme of things changes hands feudally between the lowly taxpayers and vested agricultural interests, mostly big agribusiness and large landowners. Just as in the United States, where the wealthiest factions of the country have been milking the economy for all it is worth, a similar process is at work in the European Union in transferring more and more money into the hands of those who already have it.

As reported by Valentina Pop at EUObserver, European Union farm subsidies currently total $55 billion per year, which accounts for 43% of the entire EU budget. Since EU budget funds come from the EU Member States in the form of a flat tax of ca. 1% of GDP, it is in fact the little guys who are once again paying the bill.

This can be seen from Richard Baldwin's analysis of agricultural aid to the UK in Who finances the Queen’s CAP payments? The CAP as a dooH niboR scheme [i.e. taking from the poor and giving to the rich in a reverse of Robin Hood, which is dooH niboR backwards - see Paul Krugman on Dooh Nibor Economics].

Baldwin may be writing in the year 2005 in The royalty of CAP madness, but nothing has changed in the intervening years. As written February 9, 2008 by Colin Brown, Deputy Political Editor at the Independent in 'Fat cats' benefit from EU farming subsidies:

"The Queen and one of the richest men in London, the Duke of Westminster, are among the biggest winners from this year's payment of farm subsidies.

The Duke, who owns most of Mayfair and also Grosvenor Farms Limited, was paid £562,786, while the Duke of Marlborough, a member of the Churchill family, was paid £452,944 in subsidy for the Blenheim Farm Partnership based in Woodstock, Oxfordshire.

One of the largest payments went to the Mormon Church, which has become one of the biggest foreign landowners in English farming following a payment of £1.59m from the reformed Common Agricultural Policy (CAP). The Queen's Sandringham Farms were paid £408,970 in subsidies. Half of the land is let to tenants and the rest is turned over to two studs for her racehorses, forestry and fruit farms which produce apples and juice for the Windsor farm shop."

The UK Parliament has also provided interesting figures. The House of Commons Hansard Written Answers for 27 Jan 2009 (pt 0010) show the following top 10 recipients in the UK of EU farm aid:

"Jane Kennedy [holding answer 5 February 2009]: The following table lists the 10 individuals and/or organisations that received the highest subsidies available under all schemes under the common agricultural policy for the European financial year 2008, which runs from 16 October 2007 to 15 October 2008.

Individual/organisations
£

K G Growers

3,170,052.01

G's Growers

2,908,857.66

Farmcare Limited

2,641,415.83

The Berryworld Producer Organisation

1,943,996,51

Strutt and Parker Limited

1,493,340.64

The National Trust

1,348,898.74

Sir Richard Suttons Settled Estate

1,264,889.52

Lilburn Estates Farming Partnership

1,215,740.15

Blankley Estates Ltd

1,189,030.63

Fruition Producer Organisation Limited

1,186,619.38

"
We found the following information about these organizations online:
Of course, none of these companies is to be blamed for obtaining subsidies if the EU laws permit them to do so. The fault is to be sought in Brussels, not in London, through whose incompetence billions of euros are being funneled into the bank accounts of those who least need the money.

As Valentina Pop now writes at Germany dodges disclosure of EU farm funds, to keep these kinds of payments to the rich out of the public eye, Germany has now ignored an EU law requiring full agricultural subsidy disclosure and has refused to name the German aid recipients on the grounds of "data protection", which is of course absolutely absurd from every possible legal viewpoint. As EUObserver writes:

"Claiming data protection issues, German agriculture minister Ilse Aigner on Wednesday recommended: "temporarily suspending the publication of further information on the beneficiaries of agricultural funding." Germany is the only country to have done so."

Aigner is by profession a trained radio and TV technician who appears to us intellectually and by educational background to be totally out of her league in her ministerial post. What does Aigner know about law? One of the tragedies of our media age is that "pretty faces" such as Aigner are elevated into top political positions where they wreak havoc due to their lack of qualifications.

In fact, as we already know from a November 2007 Stern article Agrarsubventionen: Volle Töpfe für die Großen, the lion's share of EU agricultural CAP subsidies to Germany is going into the pockets of the large agribusiness concerns and the old landholding gentry, just as in the UK.
The idea that the names of those who are plundering the European Union economy should be kept secret is a travesty, as pointed out by Jack Thuston in the EUObserver article by Pop:

"This is a disgrace. The handful of politicians and judges in Germany who are opposing transparency are acting as the puppets of big agri-business and wealthy landowners, who's only interest is to keep the German people in the dark about the reality of farm subsidies," Jack Thuston, co-founder of www.farmsubsidy.org, the journalist-launched initiative behind the EU requirement, said in a statement.

He also pointed to the fact that the commission can release the names of the beneficiaries if a member state dodged this requirement, because the EU executive does have this data on file.

"Farmsubsidy.org originally proposed that the commission publish the information in one single dataset, partly because it would be simpler, less bureaucratic and less fragmented, and partly in anticipation that some member states would backslide from their obligations, as Germany is now doing. Unfortunately the commission chose to pass the responsibility down to member states," he added.

Also on Friday, a court in Munster ruled that the publication of names, addresses and amounts of EU funding received by farmers complies with German legislation. The ruling cannot be challenged further."

It is quite clear in this quarter that the names must be revealed. It will now be interesting to see who does the revealing and what consequences it will have. With Ministers like Aigner, Merkel does not need enemies - they are in her own cabinet.

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