[A-List] The Corporate Begging Bowl

[Bill Totten <shimogamo@xxxxxxxxxxxxx>]

They bleat about the free market, then insist that we subsidise them.

by George Monbiot

Published in the Guardian (December 13 2005)


Never underestimate the self-pity of the ruling classes. Since Labour took
office in 1997, the Confederation of British Industry has been engaged in one
long whinge. It doesn't matter that our taxes are among the lowest and our
regulations among the weakest in the developed world. It doesn't matter that the
rich are richer than they have ever been. The Confederation of British Industry
is the monster with a thousand stomachs, that will never be satisfied.

In the submission it made to the Chancellor's pre-budget report it demanded that
the government spend less on everything except business {1}. The state should
cut its planned spending on health, social security and local authorities, and
use some of the savings to protect and enhance its "support and advisory
services for trade and businesses". Our higher education budget should be used
to supply free research for corporations. The regional development agencies
should "expand their activities to support more extensive business-to-business
networking and collaboration". Further road taxes should be abandoned, and
the climate change levy "should be frozen", but the government should help
businesses by building more roads and airports. This is what the Confederation
of British Industry means by free enterprise.

I mention it to provide some context for the extraordinary revelations published
by the Guardian last week. Felicity Lawrence used the Freedom of Information Act
to discover who has been receiving the European Union's farm subsidies {2}.
The biggest beneficiaries, she found, were not farmers but food manufacturers.
In 2003 and 2004, the sugar company Tate and Lyle was given GBP 227 million of
taxpayers' money. Nestle was paid by you and me to export milk: I wouldn't be
surprised if that includes its ever-popular sales of powdered milk to the third
world. Gate Gourmet, the airline catering company, took half a million pounds
from us for the little sachets of milk and sugar it puts on passengers' food
trays: because they leave British airspace, they qualify for export subsidies.
KLM received a farm subsidy for "rural restructuring": turning part of the Dutch
countryside into a runway. GlaxoSmithKline, Boots, Eton College, Heineken,
Grolsch, Shell and the tobacco company Philip Morris have been given millions of
pounds of farm subsidies, and at least one of them (Eton) doesn't even know why.

The British government can't be blamed for this. Mr Blair has been trying for
years to cut the money handed out under the Common Agricultural Policy, and for
years has been thwarted, principally by France and Germany. At the European
summit this week, France and Germany will doubtless ensure that nothing changes
until at least 2013, undermining everything they claim to be striving for at the
simultaneous trade talks in Hong Kong. But what bothers our government is not
that the poor are giving to the rich, but that the Common Agricultural Policy
represents a general and unnecessary drain on state resources. How do I know?
Because when Britain provides its own agricultural aid, the same thing happens.

On Thursday the research organisation SpinWatch published a report on the
outcome of the government's Curry Commission, which was supposed to help farmers
recover from the foot and mouth epidemic {3}. When the commission released its
findings in January 2002, it claimed that the measures would help to reconnect
farmers with their market, reconnect food production "with a healthy and
attractive countryside" and reconnect consumers "with what they eat and
where it has come from" {4}. The government put aside GBP 500 million to
make this happen, then used the money to make sure it didn't.

It spent GBP 2.3 million on setting up something called the Food Chain Centre,
which would "help build more effective and efficient supply chains" {5}.
The centre is run by the Institute of Grocery Distribution, a research group
working for the food manufacturers and superstores. All but one of the IGD's
board of trustees come from companies which could be accused of helping to break
the connections between farmers and the market, the market and the countryside
and consumers and the food they eat: Tesco, Sainsbury, Asda, Compass, Nestle,
Heinz, Procter and Gamble, Bernard Matthews, Kraft and Unilever {6}.
(The exception, whose presence on the board is something of a mystery, works
for the razor company Wilkinson Sword). The Food Chain Centre helps companies
to reduce their costs and enhance their profits, and we pay for it.

A further GBP 1.4 million has gone to the Cereals Industry Forum, which is
run by the food industry's big lobby groups. The government has given GBP 6.8
million to the Red Meat Industry Forum, which, among other public services,
has been helping Tesco to find cheaper ways of producing pork sausages {7}.
So it goes on. But when the National Association of Farmers' Markets, which did
exactly what the Curry Commission recommended, applied for GBP 150,000 from the
government, it was told to get lost. It collapsed soon afterwards. Doubtless the
money had already been spent on helping Tesco find new ways of destroying its
competitors.

There is nothing unusual about these handouts for private companies. In his book
Peverse Subsidies, published in 2001, Professor Norman Myers estimates that when
you add the direct payments US corporations receive to the wider costs they
oblige society to carry, you come up with a figure of $2.6 trillion, or roughly
five times as much as the profits they make {8}. As well as the $362 billion the
OECD countries were paying for farming when his book was published (or rather,
as we have seen, for activities masquerading as farming) they were shelling out
some $71 billion on fossil fuels and nuclear power and a staggering $1.1
trillion on road transport. Worldwide, governments pay companies $25 billion a
year to destroy the earth's fisheries, and $14 billion to wreck our forests.

The Energy Policy Bill the Bush administration drove through Congress this
summer handed a further $2.9 billion to the coal industry, $4.3 billion to
nuclear power and $1.5 billion to oil and gas firms {9}. According to the
Democratic congressman Henry Waxman, the oil subsidy "was mysteriously inserted
in the final energy legislation after the legislation was closed to further
amendment ... Obviously, it would be a serious abuse to secretly slip [in] such
a costly and controversial provision" {10}. Most of the money, he discovered,
would be administered by "a private consortium located in the district of
Majority Leader Tom DeLay ... The leading contender for this contract appears
to be the Research Partnership to Secure Energy for America consortium" whose
board members include Marathon Oil and our old friend Halliburton. "There is no
conceivable rationale for this extraordinary largesse. The oil and gas industry
is reporting record income and profits ... the net income of the top oil
companies will total $230 billion in 2005." It would be tempting to hold Bush
responsible for this, but that would be only half right. The oil firms were
scooping up taxpayers' money long before they put their robot in the White
House: Norman Myers reports that between 1993 and mid-1996, "American oil and
gas companies gave $10.3 million to political campaigns and received tax breaks
worth $4 billion".

This week the rich countries gathering for the World Trade Organisation meeting
in Hong Kong will tell the poor ones to open their economies to the free market.
But the free market does not exist. In every nation, the corporations hold out
their begging bowls and tax-payers line up to fill them. We are the
ragged-trousered philanthropists of the 21st century, the comparatively poor
obliged to sponsor the rich.

http://www.monbiot.com

References:

1. The Confederation of British Industry, October 2005. CBI Recommendations for
the Autumn 2005 Pre-Budget Report. Submission to HM Treasury.

2. Felicity Lawrence, 8th December 2005. Multinationals, not farmers, reap
biggest rewards in Britain's share of CAP payouts. The Guardian.

3. Andy Rowell, 8th December 2005. The 'Big Food' Takeover of British
Agriculture. http://www.spinwatch.org//spaw/images/artwork/Big-food.pdf

4. http://www.cabinet-office.gov.uk/farming/pdf/pr.doc,
quoted by Andy Rowell, ibid.

5. http://www.foodchaincentre.com/CIR.asp?cid=30&type=3&subtype=8,
quoted by Andy Rowell, ibid.

6. The Institute of Grocery Distribution, viewed 11th December 2004.
IGD Board of Trustees.
http://www.igd.com/CIR.asp?menuiD=6&cirid=1210

7. The Food Chain Centre, 8th June 2004, viewed 12th December 2005.
20% Savings to be had in Sausage Supply Chain.
http://www.foodchaincentre.com/CIR.asp?cid=42&type=3&subtype=8

8. Norman Myers and Jennifer Kent, 2001. Perverse Subsidies: How Tax Dollars
Can Undercut the Environment and the Economy. Island Press, Washington DC.

9. Eg Carol Werner, 29th July 2005. Subsidies: historic, current and the skewing
of market signals. Environmental and Energy Study Institute.

10. Representative Henry Waxman, 27th July 2005.
Letter to the Honorable J Dennis Hastert.
http://www.democrats.reform.house.gov/Documents/20050727165629-26334.pdf


http://www.monbiot.com/archives/2005/12/13/the-corporate-begging-bowl/


Bill Totten     http://billtotten.blogspot.com/