Re: Food, Food, Food

["J. Barkley Rosser, Jr." <rosserjb@xxxxxxx>]

Geoffrey and list,
      I do not have a source handy on the numbers on
either subsidies or protection levels.  Dairy products
are certainly among the most heavily subsidized and
protected in the US, as they are also in the EU.
There have been some major reductions of ag subsidies
in the US during the past decade, so it is quite possible
that the figures you cite are no longer true.  In the US it
varies greatly from commodity to commodity.
     As I told someone offlist, the real basis of my claim
that food is on average about twice as expensive in Europe
as in the US was based on the personal experience of
having lived in France for several extended periods of time
during the past decade.  Although some items, notably
wine, :-), were much less expensive in France (at least
French wine was), other items were generally more
expensive, for whatever reason, than in the US, although
more often than not of higher quality as well.  So, the
comparison was really not based on restaurants, fun as
it is to indulge in discussing them, but on actual costs
of buying food for households in groceries, etc.
     BTW, I may be wrong, but it is my understanding that
the French land tenure rules that lead to small estates
predate the Code Napoleon.  I have long heard the difference
between the British and French laws as being why there
was more immigration to North America from Britain than
from France (disinherited second sons in the former seeking
land), with the obvious long run political/cultural consequences.
Barkley Rosser

----- Original Message -----
From: <GGard97342@xxxxxx>
To: <pkt@xxxxxxxxxxxxxxxx>
Sent: Monday, April 30, 2001 4:25 AM
Subject: Re: Food, Food, Food


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