Article by John Blundell in The Business
I doubt it is possible to stand anywhere in the British countryside without one’s eye lighting upon a subsidy. In the far north of Scotland, the conifers of the Forestry Commission stand proud but purposeless. In the west of Wales subsidy preserved sheep munch the hills bare. In the south of England, the prairies of wheat waving in the breeze depend on subvention. In East Anglia, the vast sugar beet acres almost mock the tropical communities that could send us sugar far more cheaply.
Yet even this description is wrong. There are rural trades that thrive without public funds. Millions of us so enjoy the countryside that the natives of pretty postcard English villages are displaced with retirees or second home urban affluents. Planners deter new construction so “shortages” are preserved by the cobwebs of unyielding glue called “planning”.
If rural economics is preposterous on these grounds, it is crazy at the higher altitude of policy-making too. Over half of the entire budget of the European Union (EU) goes on farming subsidies. The pretext is that French peasants would revolt but for their false incomes, although current events in France would seem to render this wrong-headed. It is the city-bound French who seem to need resources. The auditors of the European Commission say much of the billions fail to reach the ruddy faced men in Wellington boots of popular imagination. Too often, the money ends up in the pockets of organised crime syndicates that own only illusory cattle or do not bother to harvest the crops on which their claims to subsidies are based.
For the last few millennia, humans ate food produced within walking range. Exceptions are few. Carthage fed Rome. Russia fed Germany. The new force that cannot be defied much longer is transport. It remains a proud moment in history when Britain abolished its Corn Laws in 1846. Free trade in foodstuffs created New Zealand and Australia. It opened up Argentina and the plains of North America. This early experiment in globalisation was of course blighted by two world wars. Then the new priority became food “security”. To those who believe the Germans are still likely to attack us this may seem coherent. To the rest of us it is distilled nonsense.
Farming and its cousin ventures such as forestry exist only in the strange aspic of subsidy. The Forestry Commission is simply an unreformed nationalised industry that endures for no detectable reasons except to keep birds and squirrels happy. The Forestry Commission is Britain’s largest landowner. Forests cover 10% of Britain’s rural land and the wood can be obtained cheaper overseas.
I believe a new and subtle force has entered this debate recently. The more thoughtful people of the left, normally indifferent to bucolic topics, have realised there is a cruel, if hitherto unseen, consequence of our elaborate subsidy regimes.
Those in the third world are blighted by the trade barriers that prevent their cheaper foods from reaching our shops. Worse, we often dump our contrived surpluses, ruining local market prices. If the Common Agricultural Policy (CAP) has been long regarded as wasteful, it is now seen to be evil. It could be that ventures such as Oxfam and Christian Aid may achieve more in breaking rural confusions than formal economic critiques, although I would not bet on it.
It is comical but it is also malignant that any European Union cow is paid more annually than a third-world family.
If the subventions were taken away, would the countryside be abandoned? No. A remote hill farm may not sustain non-subsidised sheep but it will attract holidaymakers or the retired or small-scale craft works. Already rural Britain sustains more jobs in tourism than in food production.
We can all see the constrictions and uglification of our urban areas created by the town planning legislation of 1947. It is less obvious how it damages the countryside too. The planners have a blind spot about “virtuous” Dutch barns, mock Tudor buildings and other horrors but are hostile to restorations or new homes. The very idea of a lack of space for rural homes should invite derision but planners, of course, have no sense of humour.
Details of the vast subsidies paid out are not gazetted for us all to read, although we know that the major sums go not to poor smallholders but to already wealthy major landowners. Our rural economy is a sort of reverse welfare state, taking from the poor to give to the rich.?
The notion that “self-sufficiency” is an ideal to be attained is the opposite of good economics. We can grow our own crops and our own trees if we have a comparative advantage in doing so. If not, we are far wiser to import our food and wood. This intellectual battle was won when David Ricardo and Adam Smith and others laughed mercantilism off the stage of respectable ideas.
Britain’s countryside needs to be liberalised. As in every other corner of life, human beings pursuing their own ends will achieve more than public agencies chasing the mirages of self-sufficiency or planning.
John Blundell is Director General of the Institute of Economic Affairs, whose New Rural Economy: Change, Dynamism and Government Policy by Professor Berkeley Hill et al has just been published.