Subsidies - who really needs them?

Every year the governments of the world back winners in Big War, Big Ag, Big Energy and Big Pharma. The total bill to taxpayers? A stonking $3500 billion! Yes, $3.5 trillion. How much of this do you get? Nothing. You just get to pay for it. Unless you’re Big.

You can't blame the poor despised bankers for this one, this is our elected representatives doing what they are told by unelected powers and their well-connected lobbyists.

How does it break down? Big Agriculture gets $350bn a year to degrade our soils with chemical fertilisers, kill off our wildlife and living soil with pesticides, herbicides and fungicides. Big War uses up $1500 bn a year on wars of aggression. Direct and indirect subsidies to Big Pharma cost $1000 bn. And Big Energy gets $550 bn - mostly subsidies to help struggling oil companies discover more oil.

See the pattern? Tax the little guys and subsidise the big and powerful. Then they 'optimise' taxation to make sure they pay as little tax as possible in a place like Britain.

How does it feel to know that the tax on the money you've diligently earned without any help from the government is being spent to help powerful competitors drive you out of business?

Then there's the non-governmental subsidies, harder to measure but with the same effect. Supermarkets subsidise industrialised bread to lure customers to their stores. This is ruinous for small bakers who have to make their profit from baked goods.

Ocado - a direct competitor of many readers, has managed to lose £300,000,000 over the past 10 years and managed to lose £25 million last year, but in so doing it undermines retailers that have to make a profit or go under. This is a subsidy from private equity to gain future profit but its impact is to drive honest traders out of business and clear the field for another monster. Their investors probably include your pension fund.

Every £1 of subsidy from the EU costs us £2. How so? The administration, policing, storage and fraud inherent in running the CAP swallows half the money that goes to farmers. It would be cheaper to give every food shopper a 'CAP tax back’ at the checkout and dismantle this unwieldy system. They claim subsidies help small farmers but the fact is that smallholdings and small farms began to disappear as soon as we joined the CAP.

The Common Agricultural Policy is up for reform in 2013. They've been ‘reforming’ it ever since the 1970s. Because of our subsidies, farmers in other countries can only compete by exploiting slave labour, degrading soil, destroying rain forests and poisoning themselves and the environment with nasty chemicals. Activists campaign to support the forests and indigenous people and to ban slavery, but would freak out if we had to pay the real cost of food at the supermarket. The average dairy cow in Europe gets over £600 a year in subsidy - no wonder milk is cheaper than bottled water! (And there’s still surplus cheap milk to dump to Russia, Saudi Arabia and Nigeria)

Will the CAP be reformed? What happened last time, ten years ago? While negotiators from the UK attempted to inject some sanity into the discussions the heads of state of Germany and France excused themselves and stepped out of the room for half an hour. They returned and announced that there would be no reform of the CAP until 2013. And that was that. Since then they’ve instituted a 10% Renewable Transport Fuels Obligation that keeps the countryside full of rapeseed and pays for deforestation of the last habitats of orangutans to grow palm oil to burn in buses.

These people couldn’t reform a piece of plasticine.

 

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Today’s Observer - granddaughter Saba’s writing described as “sensual, witty, audacious, belligerent dangerous brilliance.”
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