Free trade: A false dichotomy

Peter Kendall, President of the NFU

Peter Kendall, President of the NFU

Britain’s level of self-sufficiency in food is down to 59%, the lowest level since 1968.  Should we worry?  NFU President Peter Kendall clearly does, and has spoken up to express his concern.

This issue seems to have been presented on Twitter as a “free-trade versus protectionism” issue.  I don’t think it’s anything of the sort.

My old mate Dan Hannan was first up, with “We haven’t been self-sufficient in food since the 19th Century.  Why does it matter now?”.  I responded “True, Dan.  But we also have a balance of payments problem.  And maybe a food security vulnerability”.  A certain Tony C. Patrick chipped in with “We don’t make mobile phones, but we CAN & need to be self-sufficient in basic food production. Why import milk from France?  Mad!”.  Then Rory Meakin: “My borough isn’t self sufficient in food. Should I worry? Not self sufficient in cars, either.”

Dan again: “My village probably IS self-sufficient in food, if you like mutton all year round. We import food because we can”.  Dan also took the view that countries which specialise tend to be more successful than those that don’t.  I replied “It was Blair’s idea that we could forget farmers and rely on financial services.  Not ideal”.

But then we get to the nub of the debate.  An R.G. Tyler Tweeted:  “Hmm… Roger Helmer MEP‘s recent twitter conversation with Dan Hannan MEP make (sic) me fear that UKIP are more protectionist than pro-free trade”.  I replied: “Worry not Robert. You can be pro-free-trade but still want to support British industry. Think balance of payments”.

Of course Dan Hannan is a free trader in the Ricardian mode, and I have no problem with that.  But why on earth should promoting a British industry be in some way anti-free-trade?  If we don’t have industry (and exports) of our own, how will we pay for imports?  I have constantly argued in favour of free trade (and against EU protectionism).  But I don’t see that that precludes us from supporting our farmers, both in terms of clearing away regulatory obstacles, and also (if individual consumers choose to do so) buying and eating local produce.

So let’s consider why we need to support our farmers (and no, you’ll hear nothing from me about green imperatives and food miles).

First, because farmers do a great job of maintaining the countryside.  Without them, it would return to scrub and wilderness.  Second, because more food production contributes to UK GDP, and means more jobs and more tax revenues, and so indirectly benefits us all.  Third, because domestic food production directly helps our rather dire balance of payments problem.

And fourthly (if you have any pretensions to a social conscience), we face a growing world population, likely to increase from seven billion today to ten billion by 2050, and much of it is hungry.  I wouldn’t say we had a moral responsibility to maximise food production, but I would say that failing to use the resources we have for food production is downright irresponsible.  In this context I would criticise both the EU’s “set-aside” (or whatever jargon term they are using these days), and of course the outrageous waste of good agricultural land on very dubious “green energy” and biomass projects.  We don’t have food to burn.

I am (of course) not calling for import controls or any measure that would obstruct free trade.  I take it as given that our farmers have to compete, and can compete.  But I would call on the government to start cutting the red tape that binds our farmers’ hands, and leave them free to get on with doing what they do best.

There is a direct read-across here to the debate on shale gas.  It is repeatedly presented as a debate about whether shale gas will mean lower prices.  The answer is that we don’t know yet, although it certainly has had that effect in the USA.  We can at least be very sure that significant indigenous gas production will mean prices lower than they would otherwise be.  But price is not the only issue.  Even if it made no difference at all to prices, it would mean more energy security, better balance of payments, more GDP, more Treasury revenues, more jobs, more growth, more prosperity.  Of course price is important, but these other factors are arguably more important still.

 

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21 Responses to Free trade: A false dichotomy

  1. ‘Red tape’ and over-regulation is a curse to all business, It needs hard pruning, not just for agriculture. Let’s get this country back into growth and prosperity.

  2. Bellevue says:

    And then there is the problem of supermarkets, who force farmers to throw away potatoes that are the wrong shape etc. We all have a part to play in this….. but to reject perfectly edible food because it is the wrong shape is shameful.
    You talk a lot of sense, Roger……

  3. A large imbalance in the balance of payments is unsustainable in the long run, which means we must import less or export more.

    This creates a huge problem as we, as a country, are not prepared to work cheaply or hard enough for our exports to become more competitive, or to pay more for home grown goods instead of cheap Chinese stuff.

    We are also not prepared to transfer resources from non-productive public sector jobs to making things people here and abroad want to buy.

    Until we resolve this dilemma, the money we send abroad to import stuff simply comes back to buy up assets in the UK, or lend to govt. How often do we complain about “foreign owned industries”? WTF are these foreigners expected to do with the money we have sent them, if we do not make things they want? Stick it in a biscuit barrel?

  4. maureen gannon says:

    Showing my age here , Lesson after WW2 Question why did we believe that in two world wars we had been the winner, Answer because we were self sufficient, teacher went on to explain that we were able to feed ouselves and manufacture all our needs,
    Would not be able to do that in todays world shackled to Europe unable to fish or produce to our needs, indeed a war has been won and not a bullet fired, this country has been changed and nuetered by design by politicos I consider to be traitors.

  5. Mike Spilligan says:

    It would be interesting to have Peter Kendall’s comments on solar energy “farms”. Not only do those farmers (who most likely be doing some traditional farming, too; for now anyway) obtain feed-in tariffs but – and I’m guessing a bit here – their physical management consists of annual cleaning of the panels and a squirt of universal weedkiller, all done during daylight hours in fine weather; probably by a contractor using foreign labour.

  6. ex - Expat Colin says:

    As regards beef I believe the badgers have priority. The likes of Brian May don’t seem to be bothered about what happens to animal farming its clear. The problem of Bovine TB seems to have rolled on for an inordinate amount of time and science is still not sure. But it seems science is dead sure on climate change. The enemy is definitely deeply within!

  7. OK Something positive:
    1. With fracking, we could perhaps be self sufficient in oil/gas. This might well take the heat off the Muslim world and get them out of the terribly corrupting oil production spotlight. They could go back to doing what they do best: being the Levant.
    2. Out of the EU, we could open our doors to farmers from round the world, especially Africa. With more money coming in, the Africans might stop producing all those Malthusian children we see all the time on those begging adverts. A continent of farmers….And South America might perhaps ease off on drug production too.

    But – hey, I have no social conscience!

  8. Wendy Warren says:

    The last time a minister was as arrogant as Margaret Beckett, (agriculture minister in the last Labour government), in stating that food security was unimportant was about 1937 – and look what happened next. If it hadn’t been for America we would have starved. And don’t say ‘then was different’ because history has a nasty habit of repeating itself (with slight variations), Food security is always important and if we, as an island, lose it, we do so at our peril. If we strangle our farmers with red tape, they will vote with their feet and their pockets. Other members of the EU haven’t the bureaucrats to police the so-called agricultural policy, so they only enforce the bits that give them an advantage. We, like idiots, enforce every last detail and then gold-plate them.

    With regard to badgers and TB, during the early period of tuberculin-testing of all cows in an effort to eradicate TB from the national dairy herd, which was post-WW2 and into the mid-1960s, members of the public were encouraged, by advertising campaigns, to report any badgers killed on the road to the (then) Ministry of Agriculture, All the carcasses were collected and tested for TB. If they were found to be infected the herds in the area had to undergo extra TB tests to ensure that they remained free of the disease and any reactors were slaughtered, just as they are today. In those days there was never any doubt about the connection between infected badgers and TB in nearby herds. Such action, among a badger population that was minute compared with today, ensured that the infection did not have a chance to re-establish itself in a locality.

    A similar scheme today would ensure that new ‘hot-spots’ of TB did not develop and the lives of hundreds of valuable and productive animals were not lost just because of sentimentality over a badger population that has grown far too large. Yes, badgers are wonderful creatures and we should not persecute them unnecessarily, bit with no natural predators, there are far too many of them.

    • wendywarren5 says:

      Well, it’s hellish long-winded and if he can’t get it on one – or at most 2 – sides of A4 it won’t get much of a readership, but it’s correct. I suggest a summary! Regards Wendy Warren

      • Are you talking about my document? But I wanted to make it possible for anybody to read it. Even with no knowledge of economics.How to put all this in one A4 page? It will be like any article in the newspapers, that require some degree of knowledge. But thanks a lot for the remarks. If you though it is interesting, I have another 3 documents here

        http://iakal.wordpress.com/

      • Wendy Warren says:

        Yes, I am talking about your document. I truly think that anyone who didn’t understand economics would have given up after 3 pages. I nearly did and I do.
        Wendy W

      • You mean it is boring or it is not well written or both? English is not my first language. And I studied economics but I spent a lot of time in charter accountancy. So there is no point in writing something for specialists, since there are many other people to do it better. I try to right something simple. Because I think I am good in explaining things. Isn’t the issue a big one to put it in one page, for non economists, and still affect the way they thing?

      • Wendy Warren says:

        It is only boring because it is too long. I guessed that English was not your first language by the construction – and by your name. And I’m sorry but you did not write something simple!

      • But I managed to get you to the end. So you must have found it a bit interesting. How simple can the issue of free international trade be? There are limits. But I appreciate your remarks. But you have to remember that I try to affect the reader’s mind. I wrote this in Greek. In Greece. A socialist country.

      • Wendy Warren says:

        You will know then, that socialism always fails in the end, as it goes against human nature. People only remain socialists until they have property and get money – then they become Champagne Socialists. I used to say this to my uncle, who was a life-long socialist – and I mean from the 1920s. He said it had never been tried, to which I replied as above. I read it because a knowledgeable friend forwarded it to me and I pay attention to his requests – otherwise 3 pages would have been my limit!

      • The thing is that in Greece we are living the fall of socialism, and people think we are living the end of capitalism. The media are terrible. Even 3 pages would have been something. I am an amateur remember. I will get better. Does my surname means anything to you?

      • Wendy Warren says:

        Yes, quite. And no, I’m afraid it doesn’t – sorry.

      • Thank you for the advise

      • Why the socialist myth of the rich that are getting richer and of the poor that are getting poorer is a lie

        http://www.scribd.com/doc/204810193/The-rich-are-getting-richer-and-the-poor-are-getting-poorer-Another-socialist-myth

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