Apples of Discord, RT Documentary

Authored by Serban V.C. Enache via Hereticus Economicus:

Russia’s 2014 embargo on European food imports cut European farmers out of their second biggest export market. At first, they hoped the measure, taken in response to Western financial sanctions following Crimea’s adherence to Russia, would be temporary. Five years down the road, the consequences for farmers throughout Europe are dreadful. RTD travels around the continent to meet Spanish, Italian, French, Polish, German and Dutch farmers and Farmers’ Union Reps. They explain how the embargo dramatically hit their turnover and bargaining power. They worry about whether they still have a future in agriculture and question the European Union’s response to the crisis.

This particular situation is the best argument, I think, for bringing back the tradition of buffer stock policies. This prudent custom had been scrapped in favor of neoliberal market reforms; but we all know that foreign interests don’t necessarily coincide with the national interest. The role of a buffer stock policy is to ensure an acceptable base level price for both consumers and producers, irrespective of the business cycle. During times of exceptional harvests, when supply exceeds demand and prices favor consumers to the detriment of producers, the Government steps in with a bid to purchase this excess. It’s not mandatory for them to sell the unsold produce they have left, so the Government’s action in this sense cannot be labeled as coercive. The opposite occurs during periods of poor harvests. The Government steps in to sell from its stockpiles to cover the gap in supply and, in so doing, normalize prices. It’s not a silver bullet policy by any stretch of the imagination, but it’s better to have a safety net for consumers and producers.

Another good policy for agriculture, set in a fully phased in Land-Value Tax [LVT] system [also known as the single tax system], land taken out of production for soil or water regeneration purposes would no longer be considered productive land and would be exempt from the LVT, thus helping disadvantaged farmers and protecting nature at the same time. Under the present system, however, it’s the norm for farmers to put all their available land under cultivation just to pay the bills. For more info on the subject of agriculture under the LVT system, see this short video.

Prudence should come before ideology; and make no mistake, many of these trans-national accords are based on ideology. The EU political class must come to grips with the fact that European geopolitics cannot ignore the fate of neighbouring countries, unlike the US geopolitical mentality, based on the island nation context. And making bad decisions on Washington’s behalf hurts not only Russia, but the EU states as well.