Tuesday, June 13, 2006

Distorted imperfections

Stupidities of Policies: 148 Million Bottles of Wine Down the Drain
for the sake of a protected agriculture in which prices and efficiency are kept artificially.
"To avoid a tidal wave of wine and a collapse of global wine prices because of overproduction in the European Union countries that make it, the European Commission approved plans for 79 million gallons of French wine and 69 million gallons of Italian wine to be distilled into undrinkable, industrial-grade alcohol. But Europe's agricultural commissioner, Mariann Fischer Boel, cautioned that while such stopgap action might bring temporary relief, "it does not deal with the core of the problem — that Europe is producing too much wine for which there is no market."(JOHN TAGLIABUE, NY Times, June 8th 2006)
It seems that this type of stupid agricultural policies that promote paysans to produce less and keep artificial prices high are the ones that prevail in all developed economies. One does not need anymore to go local anymore (as most initiaves are asking to) or support the local farmers. The Government does it for you in the form of subsidies and trade barriers. why? so you can dump/waste whatever is "in surplus"..blah-blah.a lot of nonsense. No market for wine? These people obviously don't know what elasticity of demand is but they sure realize that such dumping actions are UN-ethical. But these policy distorsions are just the top of the iceberg; there are so many examples that we do not need to reenforce the popular thin trust in governance and competenciens.

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