agriculture

Farming subsidies in the UK

Farming subsidies in the UK

One potential benefit of leaving the EU is the opportunity to radically change how we spend agricultural subsidies. The Common Agricultural Policy CAP is one of the great mistakes of the EU. Given the share of EU spending on agriculture, it is their flagship policy, yet the CAP has given a very poor return regarding economic and social welfare. Unfortunately, the EU has become caught by powerful agricultural lobbies, and it has proved very difficult to wean Europe off these very extensive subsidies. There is no other industry which…

Primary Products

Primary Products

Primary products are goods that are available from cultivating raw materials without a manufacturing process. Significant primary product industries include agriculture, fishing, mining, and forestry. Examples of Primary products oil water fish fruit crops wood Often developing countries have a comparative advantage in producing primary products. This is because many developing countries (e.g. in Africa are rich in resources, but poor in capital and education). Therefore, they can mine and export primary…

Price of Raw Coffee on Commodity markets

Price of Raw Coffee on Commodity markets

Readers Question: How is the market of raw coffee determined  on the world commodity markets? The price of raw coffee is determined by the basic principles of supply and demand. Demand for coffee beans will be largely determined by the large coffee firms such as Nestle and Kenco. In turn their demand depends on the consumer demand for drinking coffee. In recent years the demand for coffee has been increasing because: Coffee has become a more fashionable drink with an explosion in the…

placeholder

Prospects for Food Prices

I remember, not too recently, when supermarkets where happily having a price war over the price of bread, and you could easily pick up a loaf of bread for 7p. However, the 7p loaf seems a distant memory now as the price of wheat has increased from £90 a tonne to £180. Many loaves now cost over £1. The price of wheat and food prices is being driven higher by various factors Increased Use of Biofuels. Food such as mazie, grown to provide renewable energy and an alternative to oil. However,…

placeholder

Why does the EU Give susidies to the Queen?

It may be hard to believe, but decades after being condemned as a grotesque waste of taxpayers money, the EU (through the Common Agricultural Policy) still give hundreds of thousands of £ in subsidies to rich farmers. It is estimated that the Queen, (who is hardly on the breadline herself) receives approximately £404,000 a year in European subsidies for her Sandringham estate and at least £140,000 for Windsor Castle. Some of the richest British aristocrats, such as the Duke of Westminster, the Duke of Marlborough and the Earl of Leicester,…

Olive Oil

Olive Oil

Should Govt intervene with minimum prices for goods like olive oil. Reasons for minimum price A minimum price ensures a minimum income for farmers. For example, if supply increased prices would fall significantly. Demand for agricultural goods is inelastic, therefore this makes prices more volatile Supply can vary due to weather conditions. i.e. agricultural markets are more prone to market failure than other markets. (more…)

placeholder

Olive Oil and Spanish Economy

How might a fall in production of olive oil affect Spanish economy. (8) Olive oil is an important commodity, therefore farmers are likely to see a fall in revenue because they have less to sell. Therefore, this also results in lower exports and less export revenue for the economy. However, the fall in production has increased price. Because demand is inelastic, this could actually increase the incomes of farmers, even though they have less to sell. (the % increase in price is bigger than than the % fall in quantity -…