Re: Food, Food, Food

[GGard97342@xxxxxx]

29th April 2001

In a message dated 25/04/01 21:58:37 GMT Daylight Time, rosserjb@xxxxxxx 
writes:

> One of the main reasons
>  for this discrepancy is the very high price of food in Europe,
>  despite the fact that the US also has some ag protectionism.

The OECD report of 1990 put US subsidies per farmer at two and a half times 
the EU level. A new report has just been issued but I do not yet have a copy. 
Does anyone know the comparison now? I heard somewhere a figure of $1400 
subsidy per milk cow. Barkley seems to assume that US subsidies are less than 
EU. Is this correct. Here we believe it is the other way around. US import 
policies are also very restrictive. I once listened to a French vigneron 
complaining to an American tourist about the fact that the american would be 
allowed to take back only two bottles of French wine.  

The root of the European (excluding British) agriculture problem is the Code 
Napoleon and its inheritance provisions. It caused agricutural holdings to be 
splintered into tiny plots. Slowly the effects are being neutralised. Farms 
are being amalgamated. In the 23 years to about 1992 French emloyment on the 
land dropped 1.4 million, if memory serves. If the pace of this change is 
stepped up it will hand power to the populists. There are already towns in 
rural France where 99% of the houses are either derelict or used as holiday 
homes. There are some in Europe who remember that it was the removal of farm 
subsidies by the Weimar government which gave Hitler the critical votes to 
get power. In France at the last presidential election, the populists 
combined polled 35 per cent, just 2.5 per cent less than the level that gave 
Hitler power. I saw the posters, "Le Pen pour les Agriculteurs." Luckily the 
populists are split between communists, the National Front, and other groups.

I would suggest there is no point in removing farmers from the land if there 
is nothing for them to do. Nothing would be saved. There are already 4 
million unemployed in both France and Germany. The suggestion that the many 
are mulcted to provide a fat living for the few seems to ignore the facts 
about agricultural incomes. Perhaps there are fat cats in US farming, but 
there are few if any in Europe. 

A lot of the EU agricutural budget, like the American,  goes towards 
subsidising exports, which distorts world prices downwards, and disadvantages 
the poorer producers. 

Food is indeed cheap in the US and I dined at La Vela in 7th Avenue, New York 
at little more than half what I would pay in Knutsford, Cheshire for the same 
Italian meal, but I can get a marvellous "menu du terroir" at the M. Philippe 
de la Grange's restaurant in Pommard, France, for half the New York price. 
Washing it down with his father's white Meursault would be a bit expensive in 
both places. Do Americans make the right comparisons? Remember a French 
restaurant bill is inclusive of tax and service, although Americans no doubt 
cough up their customary 15 per cent and US-French relations being what they 
are, the Frenchman probably accepts it, whereas Englishmen who are mad enough 
to tip in France can have it refused. There are some very, very pricey French 
restaurants, temples of haute cusine, but those who like French family 
cooking - and one would have to be insane not to - can dine very cheaply at 
family run Logis de France. I suggest the Hostellerie du Parc at Les Cabannes 
near Cordes sur Ciel and choose M. Claude Izzard's prize winning Lapin aux 
Choux. Sadly I have not been there for about five years, but I recall he put 
the lapin on the statutory prix fixe menu which was FF75 for a three course 
meal. Normally he charged that for the lapin alone. M. Dressingval of the 
Auberge du Camp Roman at Chassey le Camp in Burgundy (my joint favourite 
French hotel) sent me his winter prices. Half board for a week was FF2100. 
Where does one match that in the US? American wine buyers stay there. I wish 
they would stay away!

British high prices reflect both a high currency value and high demand. 
Planning restrictions are used to keep up prices. Our local left-wing 
agitator opposes every application for a shop to be converted into a 
restaurant, despite the fact that cuisine is our town's speciality, the 
gourmet capital of North West England.

Pub meals reflect also the effect of one of Maggie Thatcher's lesser known 
follies. Maggie decided to introduce competition into the pub business, and 
brewers were consequently discouraged from owning their own pubs any more. 
This had the magic effect of bringing about the realisation that the owners 
had not been exploiting the value of their assets properly. The pubs were 
formerly let to tenants at nominal rents, and the tenants were tied to the 
brewer's beer at a high price. The tenant's wife did meals at prices which 
reflected no fixed costs, as those were born by the beer sales. Naturally the 
meals were good and cheap. When the ties were cut and the owners of the pubs 
ceased to be the brewers, they wanted their full pound of flesh. Rents 
rocketed, and so did the price of meals and beer. The trouble is there is a 
limited supply of good pubs because to be really popular they have to be at 
least two hundred years old. 

Sometimes the implementation of market principles can have surprise effects, 
especially in a traditional business where no-one knew what they were doing, 
least of all Maggie's economists. Business rates on pubs are also high, and 
what must really hurt is that they pay very high water rates!

Most academic economists do not have a clue about agricultural economics. 
Agriculture breaks many the rules of classical economics and always has done. 
(For instance, low prices increase output.) That is why the precursor of the 
CAP is laws 48 and 51 of Hammurabi.

I do speak with some experience of agricuture. I have administered 
agricultural estates and earned a living from helping farmers. Because of 
that I was the chosen tom be economist and taxation expert of the greatest of 
all agricutural scientists, Professor Sir Frank Engledow. See "Britain's 
Future in Farming" 1980, edited Engledow and Amey. We formed the Cambridge 
Policy Conference on the Future of British Agriculture. Engledow as a young 
man dramatically increased the yield of cereal crops, and in WWII 
master-minded the British food policy brilliantly. 

By the way, the old crack about the Brits having the worst food in the world 
and the best table  manners is no longer true, though fortunately the table 
manners have not yet descended fully to the level of you know who, and most 
of us can still balance peas on the back of a fork held in the left hand. I 
have recently returned from 8 days in the Scottish Highlands and had 
excellent meals in every hotel. The restaurant prices at the Lochalsh Hotel 
were high but everyone was taking the bar meals, most of which were at £6.95 
for the main course. They were excellent. Scotch sirloin was £10.50. As the 
bar room has one of the most magical views in Europe I rate that cheap. The 
price includes VAT at 17.5%. One does not normally tip much or indeed 
anything for bar meals.

This is a far more satisfying subject than most PKT topics.  I have another 
56 French hotels I could describe but I will desist. Ric must already be 
concerned at my garrulousness. 

Geoffrey Gardiner