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Friday, October 27, 2006

Help us drain the wine lake

Sadly not an invitation to some kind of depraved EU party, but merely a tender in the Scotsman for companies to bid to turn 100,000 hectolitres of the EU's surplus wine into industrial products which the EU can then dump onto other countries.

"Tendering procedures should be organized for the sale of wine alcohol for new industrial uses with a view to reducing the stocks of wine alcohol ... and enabling small-scale industrial projects to be carried out and such alcohol to be processed into goods intended for export for industrial uses."

Actually, in total the EU has about 1.5 million hectolitres of low quality plonk that it wants to get rid of.

In fairness, during the summer the Commission came up with a plan to rein in the worst excesses of the system. But even that was rejected by wine-making member states led by France.

Obviously, this isn't economically rational or good for the environment. It's a reminder of what an amazingly complicated and sprawling set of different policies are covered by the shorthand expression, "the CAP". And a reminder how little progress has ever been made towards reform.

The CAP wine policy was set up just before the UK joined the then EEC, in 1970. According to the slightly sozzled southern-European sounding Commission website:

"It started out very literal, with no curbs on plantings and very few market regulation instruments (the aim being to confront the annual variations in production). It then coupled freedom on plantings with the virtually guaranteed sales, thus generating serious structural surplus. From 1978 it became very interventionist with the ban on planting and the obligation to distil the surplus."

And since then, despite a lot of to-ing and fro-ing, not much has changed. The EU is probably the best example in the world of the economics of public choice theory. Well dug-in vested interests get concentrated benefits and lobby hard to keep them, while the rest of us get lumbered with the (more diffused) costs.

One of the key strategies for any vested interest group is to minimise the amount of information that is available about their cosy arrangement. Organisations like Farmsubsidy.org are trying to counter that through a relentless campaign for freedom of info.

But it isn't easy. We have managed to get some info about CAP spending out of the Commission. But not much.

We do know how much each member state got for wine subsidies in 2004. The biggies are Spain on €434m, Italy on €445m, France on €245m, and Greece on €190m. Interestingly, Britain is guilty too - though it only got a paltry €500,000. (Amazingly the UK even managed to claim €100k worth of tobacco-growing subsidies).

But when it comes to the really sensitive stuff the Commission just tell you to forget it. In the summer we asked about how much subsidised produce the EU was dumping on a range of developing countries.

From xxxxxxxxxx@cec.eu.int
Sent: 21 August 2006 10:36
To: Juan Monras
RE: Some questions on CAP

Dear M. Monras,

Thanks for your messages. Regarding your question, I can only confirm the answer from Mrs Borchmann, i.e. that this is a difficult task and set of information to provide.

...information for subsidised exports per country of destination is more difficult to obtain. DG AGRI services keep records of the export licences and subsidies granted. However export licences are often valid for a region and not for a single country: it could in some cases prove impossible to calculate export subsidies by destination, unless reasonable simplifying assumptions. In many cases, Member States do not provide detailed information on the destination of subsidised exports as they only provide us with the total of export certificates for their own country.

In summary, I am afraid that the provision of the required information appears very difficult, if not impossible.

Best regards,


You mean you don't even know how much you dumped on poor countries?

Now that's very convenient, isn't it?

1 comment:

Anonymous said...

The Commission is often unwilling to release the data at a level of detail that you need. It's usually necessary to go to the member state, as we did for the 'Milking the System' report which took a magnifying glass to dairy export subsidies in the UK - who got the money and who got dumped on.