This article appeared in the March 2002 issue of Vetscript the journal of the New Zealand Veterinary Association

When cows can fly (first class)

In a rational world the case for trade would be self-evident. So would the case for science and there would be no need for articles entitled Defending science, which I saw was the title of last October’s ‘Rottweiler’ column. But then in a rational world there would not be ten times as many astrologers as there are astronomers, as the late Carl Sagan pointed out. (1)


If you as scientists feel that your rational, patient sifting of facts, your dedication and good intentions are alone in being singled out for opprobrium by the massed forces of irrationality I have to tell you that it’s not true. Those of us who work to provide opportunities for New Zealand’s agricultural exporters are in the same position. There are millions of people in the developed countries who would, if given the chance, like to buy our agricultural products, many of whom are poor and don’t want to spend more than they have to on food. But their governments deny them this chance, by severely limiting imports, and subsidising their own domestic agriculture sectors.


The Paris-based think tank OECD, which comprises 30 developed country members, has calculated that the value of consumer and taxpayer support for farmers in developed countries amounts to around US$330 billion per annum. This compares to the US$10.7 billion they give to the poor countries as official development assistance. In other words, the rich countries spend US$330 billion making life difficult for farmers in the developing world and a tiny fraction of this amount trying to help them. It may be hard to grasp just how much US$330 billion is: it is a staggeringly large sum. It is enough for each one of the OECD’s dairy herd of 63 million cows to be able to fly around the world, first class, and still have almost US$1000 in spending money. And thanks to the largesse of OECD consumers and taxpayers they are able to enjoy this trip every year.


We in New Zealand are not the only victims of this sort of intervention: there are countless millions more in the developing countries who would like the chance to export their agricultural products so that those in the rich world could buy them. As Oxfam says of the anti-globalisation movement: “The real debate is about the policies needed to make globalisation work for the poor. Developing countries need less free-market advice and more access to protected northern markets.” (2)


So our two disciplines, animal science and trade policy, or more broadly, science and economics, are similar in that we are both confronted by a chronic and sometimes violent irrationality, and what is really exasperating is that those who protest against our work are some of its major beneficiaries. Even the governments that lavish so much of their citizens’ funds on agriculture know it’s destructive and irrational: beginning in 1987, and repeatedly since then, they have declared that they would make ‘progressive and concerted reductions in support’. But they have done very little, and total support to OECD agriculture has actually risen since 1987.


What is it that makes this particular sort of irrationality so difficult to deal with? After all, the evidence has been around for decades that only a tiny fraction of this agricultural support goes to those who need it; that much of it is wasted, or helps generate structural surpluses, at great cost to consumers, taxpayers, would-be exporters, the environment and animal welfare. I believe there are several factors, including: the smallness of agriculture in comparison with the other sectors that subsidise it; the overrepresentation of agricultural interests in parliaments; and the power of the large companies upstream and downstream of farms, who are big beneficiaries of the enhanced, subsidy-driven, spending power of farmers.


But perhaps the biggest reason for the persistence of these nonsensical policies is that the subsidising machine is so entrenched within government. It’s the people who make the rules and administer them - the hundreds of thousands of government-funded administrators whose sole job is to dole out subsidies and obstruct willing buyers and willing sellers from transacting their business - who, in my view, are the real impediments to progress. Of all the vested interests, it is those within government that are hardest to change. Allied with protectionist politicians whose tenure in government similarly depends on doling out subsidies to farmers, they form a formidable coalition against meaningful agricultural policy reform.


Perhaps our two professions can learn from each other. Economists failed to realise that certain policies, when they require large numbers of government employees to administer them, are virtually impossible to end. One result is the OECD’s flying cows, with their champagne and canapes. There is a lesson there for scientists: even the most irrational, anti-scientific policy can be reversed, as long as it does not become the sole means of support for large numbers of government employees. But scientists can teach myself and my colleagues certain things too. The late Carl Sagan was only one of many illustrious scientists who have railed against the forces of irrationality, and I am much impressed by the spirited movement against pseudoscience and irrationality that we are seeing in all the media. Now if only my professional predecessors had done the same thing years ago and argued as persuasively against pseudoeconomics….



Ronnie Horesh







(2) Letter to the Economist, 3 November 2001.


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