"Torsten Brinch" wrote in message
...
On Tue, 24 Dec 2002 19:51:03 -0000, "Michael Saunby"
wrote:


"Torsten Brinch" wrote in message
.. .
On Tue, 24 Dec 2002 18:12:43 -0000, "Michael Saunby"
wrote:

Why waste money on reducing the number of farmers?

I just explained it. Such that each can have a reasonable income.

The UK has "income support" for that. The only reason some farmers
aren't
eligible is because they own land.

I am aware that UK has an income support system, and that it is meant
for those without means to support themselves.

Not really true. It ensures that people have the means to provide for
their family whatever the size of that family however low their income.
e.g. even a farmer or cleaner with a family of 10 children will receive
enough financial support to ensure that they had food, shelter, etc.


If they did sell the land to another
farmer then the same quantity of crops would be grown and the nation
wouldn't know the difference.

But -we- know the difference, the same volume now produced by fewer
people, everything else being equal, meaning more profit to each of
them, and more efficient production to society.

Untrue. Food is now much cheaper. Farmers must compete with each other.
Any farmer that manages to grow more on the same land with less labour will
make more money. However UK labour costs are extremely high so it hardly
ever pays to trade a high labour system for one with low labour and instead
use machines, chemicals, and new crop varieties. What is surprising is
that the rest of the world hasn't done the same - until you look at the
cost of labour in China, etc.


UK employs 2 % of its workforce producing only 0.8 % of the GDP in
agricultural products.

Sad though it is, that's actually quite good for the UK. The vast
majority
of UK workers contribute very little to GDP, e.g. those working in
tourism,
teachers, nurses, etc.

Look up the definition of GDP.

And that would somehow increase the value of what our tourism and health
services produce? All these industries have significantly increased the
number of people employed in recent years - the present government favours
employment in these sectors over efficiency. Surely if you increase the
number of people employed in sectors that year on year deliver much the
same then GDP has fallen? Granted the number of exams taken per child in
our school system has increased quite a lot, but the number of children
taught hasn't.


Money would seem better spent getting rid of a
bunch of old farmers who have gotten use to be fed by society, than to
continue supporting this kind of imbalance.

The farmers only get payments if they produce.

That's irrelevant, the question is if they do it efficiently -- if
someone could do it more so with the same resources, we should not pay
someone to carry on using the same resources to produce inefficiently.
(the irrelevancy aside, I am sure you must have heard about decoupling
and setaside)

I don't believe farmers do use their resources inefficiently; except when
they are directly rewarded by government for doing so.


The old farmers I know are
keeping hold of what land they can, and letting it out, because they
don't
have very good pensions. The land they own is their pension.

As you describe these persons, I would call them speculators in land
value, not farmers.

It does seem they have become such - and probably a smart move given the
state of UK farming and the ever growing population with its appetite for
houses, roads, airports, golf courses, etc.


The
agricultural value of their land is established by the level of subsidy,
the development value by government policy - so it's government policy
either way. I suppose the laws on inheritance tax and capital gains
could
be changed to force some to sell up.

Yes, that's just a matter of policy. Financing whatever subsidies the
agricultural industry may need from a tax on the agricultural value of
land would seem to be able to do away with the problem, with minimal
market distortion.

It happens naturally as
production efficiency increases.

Certainly. The current subsidy system is being criticized of promoting
'hyper'-efficiency, by distorting the market for land and agricultural
inputs, leading to an artificial high competitive edge for larger farm
businesses . This would lead to a mis-allocation of society's
resources, just as well as keeping non efficient producers in business
will. In the UK, indeed it is apparently the complete middle section
which is being forced out of business, rather than the tapering off
from top to bottom which would expectedly be seen under the healthy
natural development you are referring to.


Farming is being divided into two distinct industries - a
hyper-efficient
food production industry and another pretty fields with traditional
farming
that supports tourism, hobby farming, etc. This seems to be current
government policy. I guess farmers must soon choose which game they
want
to play.

Society cannot be interested in promoting hyper-efficient production
in the sense that I meant it, I am not sure it can be the intended
policy. I see it more like a harmful side effect among many others,
of a flawed common agricultural policy.

The food processing industries also benefit from a concentration of
production in large scale producers. They don't want farms so big they
actually have real power, just large enough to reduce the number of
suppliers to ensure they are easily managed. Near where I live is a very
large cheese factory, it's a part of one of the largest cheese makers in
the world (top 5), which is part of a 3 billion (USD) annual turnover food
processing business (www.glanbia.ie) This sort of thing turns food
production on its head. There are no dairies, or farmers here that have
anything like the financial clout these people have. Quite likely they in
turn lack the power of the large supermarkets and pizza manufacturers that
they supply. In what is still a largely farming area employment, and
wealth, may soon be largely in the hands of food processing businesses.
These types of business benefit from every increase in production - cheaper
raw materials, and in reduced agricultural employment - more labour for
them. And of course they benefit is a very direct way from subsidy, because
it provides raw materials at below production costs that they can then turn
into a product that can be traded internationally - unlike raw milk.
Another local firm produces tinned milk puddings, and another cheese cakes.
There's no way these businesses would support anything other than
hyper-efficient production; but at least you don't need worry that such
production will make farmers rich - that's already been taken care of.

That's all from me for now - Merry Christmas everyone.

Michael Saunby