Letter from Italy: Slippery Business

Dear son

My friend Vikram Doctor shared this with me. As you know we cook with olive oil assuming that its nice and healthy. As it turns out, the world of olive oil is full of dodgy characters. And extra virgin is not so virginal at all

So why am I sending this to you? For you to see how government subsidies and rules distort the marketplace. And why a dis functional government can really screw up basic operating principles of a good society and economy. 

Fraud and crime is not stoppable. But incentives like subsidies etc will always encourage crime. And think of one statement. You can make more money and be punished less by stuff like this than by pushing drugs!

Fascinating. 

Love 

Baba

Letter from Italy: Slippery Business : The New Yorker
http://www.newyorker.com/reporting/2007/08/13/070813fa_fact_mueller

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On August 10, 1991, a rusty tanker called the Mazal II docked at the industrial port of Ordu, in Turkey, and pumped twenty-two hundred tons of hazelnut oil into its hold. The ship then embarked on a meandering voyage through the Mediterranean and the North Sea. By September 21st, when the Mazal II reached Barletta, a port in Puglia, in southern Italy, its cargo had become, on the ship’s official documents, Greek olive oil. It slipped through customs, possibly with the connivance of an official, was piped into tanker trucks, and was delivered to the refinery of Riolio, an Italian olive-oil producer based in Barletta. There it was sold—in some instances blended with real olive oil—to Riolio customers.

Between August and November of 1991, the Mazal II and another tanker, the Katerina T., delivered nearly ten thousand tons of Turkish hazelnut oil and Argentinean sunflower-seed oil to Riolio, all identified as Greek olive oil. Riolio’s owner, Domenico Ribatti, grew rich from the bogus oil, assembling substantial real-estate holdings, including a former department store in Bari. He bribed two officials, one with cash, the other with cartons of olive oil, and made trips to Rome, where he stayed at the Grand Hotel, and met with other unscrupulous olive-oil producers from Italy and abroad. As one of Italy’s leading importers of olive oil, Ribatti’s company was a member of ASSITOL, the country’s powerful olive-oil trade association, and Ribatti had enough clout in Rome to ask a favor—preferential treatment of an associate’s nephew, who was seeking admission to a military officers’ school—of a high-ranking official at the Finance Ministry, a fellow-pugliese.

However, by early 1992 Ribatti and his associates were under investigation by the Guardia di Finanza, the Finance Ministry’s military-police force. One officer, wearing a miniature video camera on his tie, posed as a waiter at a lunch hosted by Ribatti at the Grand Hotel. Others, eavesdropping on telephone calls among Riolio executives, heard the rustle of bribe money being counted out. During the next two years, the Guardia di Finanza team, working closely with agents of the European Union’s anti-fraud office, pieced together the details of Ribatti’s crime, identifying Swiss bank accounts and Caribbean shell companies that Ribatti had used to buy the ersatz olive oil. The investigators discovered that seed and hazelnut oil had reached Riolio’s refinery by tanker truck and by train, as well as by ship, and they found stocks of hazelnut oil waiting in Rotterdam for delivery to Riolio and other olive-oil companies.

The investigators also discovered where Ribatti’s adulterated oil had gone: to some of the largest producers of Italian olive oil, among them Nestlé, Unilever, Bertolli, and Oleifici Fasanesi, who sold it to consumers as olive oil, and collected about twelve million dollars in E.U. subsidies intended to support the olive-oil industry. (These companies claimed that they had been swindled by Ribatti, and prosecutors were unable to prove complicity on their part.)

In 1997 and 1998, olive oil was the most adulterated agricultural product in the European Union, prompting the E.U.’s anti-fraud office to establish an olive-oil task force. (“Profits were comparable to cocaine trafficking, with none of the risks,” one investigator told me.) The E.U. also began phasing out subsidies for olive-oil producers and bottlers, in an effort to reduce crime, and after a few years it disbanded the task force. Yet fraud remains a major international problem: olive oil is far more valuable than most other vegetable oils, but it is costly and time-consuming to produce—and surprisingly easy to doctor. Adulteration is especially common in Italy, the world’s leading importer, consumer, and exporter of olive oil. (For the past ten years, Spain has produced more oil than Italy, but much of it is shipped to Italy for packaging and is sold, legally, as Italian oil.) “The vast majority of frauds uncovered in the food-and-beverage sector involve this product,” Colonel Leopoldo Maria De Filippi, the commander for the northern half of Italy of the N.A.S. Carabinieri, an anti-adulteration group run under the auspices of the Ministry of Health, told me.

Library users 'become better readers'

Here’s an interesting article. I quote:

Children who use their local public library are twice as likely to be above average readers, a report has said. A survey of 17,000 children in Great Britain for the National Literacy Trust found they were also twice as likely to read outside class daily. Those reading below the expected level for their age were twice as likely not to use their local libraries, it said. Public libraries do not disproportionately attract children from poor or rich homes, it added

First of all, remember that this is being driven by the financial cuts to the local councils which is driving them to cut services such as libraries. Now, I am a bit ambivalent about this. On one hand, I am conscious of the fact that new technology and changes in behaviour means that amazon, ebay, smartphones, kindle et. al are driving towards e-books and direct delivery of books to home. Books are entertainment, remember, and kids do have tons of alternatives ranging from tv to computers to what have you. You really dont need libraries that much, but there is still a need. As a confirmed and total nut about books, I do love libraries, heck, i have one at home. So the disappearance hurts.

But going forward, the article sheds some light on some very sad facts, I quote:

It found that just under half (44%) of the children surveyed used their public library. Those that did not go were more than three times more likely not to read outside class and to rate themselves as not very good readers.

The most common reason for children not to go to their public library was that their family did not go. The report said: "Family engagement is well understood as a key element in supporting educational achievement, and it seems that public library use, as well as being associated with similar positive child outcomes to school library use, has in addition a particularly specialised correlation with family support for reading.

"Young people who use their public library are twice as likely to say that they talk with their family about what they are reading at least once a week and report that they get significantly more encouragement from their parents in reading generally."

Now here’s another conundrum. Going to the library does not really cost anything. But is this genetic in nature? Something about upbringing? Generalising wildly, rich people will have their own libraries, poor people are too ignorant and this is only a middle class thing? So when parents arent interested in books, why would their kids be interested in books? Sad sad sad. The end result? did you know that one in six people in the UK struggles to read write and communicate? And then we go about shutting down libraries.

Cubans free to buy peas and potatoes

Welcome to communism and state control. Now Cubans can buy as much as they want of peas and potatoes. Only problem is that now the prices are 20 times as much. Controlling the cost of basics is quite important in many poor countries but Cuba of course has to take it to the extreme. Reminds me of the fact that the price of bread in erstwhile USSR didn't change for decades altogether and then in the end, the cost of maintaining a highly controlled militaristic subsidised society made it implode.  Welcome to subsidies hell. And like all subsidies, they end up distorting the market, create weird incentives and ultimately fail to meet the objectives.

Why should vaccines be free?

I agree with this company, why on earth should the vaccines be free? Say I am a shareholder of GSK and Novartis (which I am not, btw), and I have invested my money in its stock. Why are you expecting ME to fund the vaccines? What's the solidarity in that? If my returns are lower, do you think anybody will be willing to top up my pension? in solidarity? I dont think so. I quote:

Novartis, the Swiss pharmaceuticals group, defied the World Health Organisation and some of its corporate peers by ruling out a donation to the poor of vaccines to counter the latest flu pandemic, and saying developing nations or donor nations should cover the costs.

Daniel Vasella, Novartis chief executive, told the Financial Times that he would consider offering discounted pricing to low-income nations, but unlike other drug companies, including GlaxoSmithKline, would not offer vaccines for free. He said: “If you want to make production sustainable, you have to create financial incentives.”

It definitely makes sense, the firm is not running as a bloody charity, you know? it has to pay its suppliers, its staff and its other commitment holders. If you take the argument to its logical conclusion, every medicine it makes will be expensive to the poor because in effect even a 1 cent/paise/pence cost will be quite high for the poor. So does that mean that in solidarity, this firm should be run as a charity? No way. So Margaret Chan, the WHO Director General, please note that you are saying complete bollocks.

Also remember what happens if you make things like this free, then no private firm produces them. Many of these instances have happened in our history, for example with measles and polio vaccines in the past. When will these idiots learn? This is not to say that the governments cannot step in and purchase sufficient vaccines for their populace or some international body does it for them, but asking something like this is forced charity, that’s not solidarity, that’s stupidity.

Subsidies..

 

click on the image for a bigger image or here.

Technorati Tags: subsidies

Prostitutes offer petrol discounts

Wow, now that's selling...Again, nothing wrong with it, but it clearly goes to show that the laws of economics are biting hard. I was in a conference dinner yesterday at the Canadian High Commission where I was hearing about how Nova Scotia is giving tax breaks for people who want to go invest in Nova Scotia. Very good, and that's what all the countries around the world are doing (personally speaking, i think that's a wrong move because once you have prostituted yourself for a sales tax, what's stopping you from prostituting yourself for another region for another sales tax?) Now read this:

 

 

American prostitutes are offering free fuel after finding that high petrol prices were keeping customers away.

In the Nevada desert, where it is legal to run brothels, truck drivers make up a significant proportion of the men who like to pay to stay awhile.

But with bowser prices making filling the tank of the big rigs which ply their trade on America's highways almost prohibitively expensive, something has had to give.

The Nevada Brothel Owners Association claim they are bearing the brunt, with revenue in some establishments dropping by up to 45 per cent since the oil crisis began.

Pakistan finally belling the cat?

You cannot violate the laws of economics for too long. The giant sucking sound that the Pakistani Army makes when it is the parasite on the Pakistani State, People and rest of the world seems to be diminishing by a small amount. I quote;

Pakistan’s new coalition government has ordered a “massive cut” in budget expenditure across the board, including military spending, to cope with the rising cost of fuel and food subsidies

How much do you want to bet that nothing will be cut on the military expenditures and the brunt of the spending cuts will fall, as usual, on the poor disenfranchised Pakistani citizen? But, the fact that a finance minister had the temerity to say this (well, he said this in London, another sad fact, I rather doubt that he would have had the gumption to say this in Isloo).

See some of my previous essays. Here and here.

Still lets see...

Technorati Tags: Pakistan,Government Stupidity,Army

Great idea, if you get public money, you get to show it to the public

So if there is subsidies given to farms from public money coming out of my pocket, then we should see it, no? So great idea! I quote:

As of next year, member states will be required to make public a list of all recipients of EU agricultural subsidies, together with full details of amounts received, putting an end to the traditional secrecy surrounding handouts from the EU’s largest fund.
According to a new Regulation adopted by the Commission on 19 March, the data will have to be published on special national websites by 30 April 2009, so that members of the general public can monitor how money under the EU’s €55 billion Common Agricultural Policy budget is being spent.

Read the full thing, its amazing!

All this to be taken with a grain of piquant salt!!!

Does teenage childbearing increase smoking, drinking

The answer from this paper is yes. Its a bit of a d'oh statement, no? But then, would these teenage mother's hear? remove the incentives (economic and social) and these behavioural patterns will drop away.


This paper analyses the causal effect of teenage childbearing on smoking, drinking and body
size using a sample of Australian twins and their relatives. Fixed effects estimates on samples
of siblings, all twin pairs and identical twin pairs show that teenage mothers smoke more
during their lives. Teen mothers tend to have a higher probability of being overweight,
especially if they are older than 40 years. Their spouses are more likely to smoke and drink
more. The quality of the spouse seems to be an important mechanism through which teenage
childbearing affects subsequent maternal health.

All this to be taken with a grain of piquant salt!!!

Britain's benefits generation: State handouts now a 'way of life for six million'

This is unbelievable.

Six million Britons are living in homes where no one has a job and "benefits are a way of life", a report by MPs revealed yesterday. And they cost the taxpayer nearly £13billion a year in state handouts. This army of families on benefit - nearly one in six of all households in the country - has been untouched by a decade of Labour's attempts to get them into work, said the Public Accounts Committee. Four out of five of these homes have no one who is even looking for a job.

If somebody will give me money, food, clothing, shelter and a house without wanting me to work or anything, tell me why on earth would I want to work? It is perfectly logical to me. So what about all the jobs that have been created? Well, they have mostly gone to the immigrants. And then people whine about immigrants flooding in? Well, stop the welfare system from producing this level of dependency! And its not like these 6 million are old age pensioners or children or disabled people, we are talking about 4.3 million adults who are basically sucking on the tit of the taxpayer. Welcome to Britian.

And get this! The mind boggles, I am paying taxes for these dead beats?

Some 100,000 drug users and alcoholics are claiming state handouts on the grounds that their habit is a disability, it was revealed yesterday.

All this to be taken with a grain of piquant salt!!!

Forcing people to sell milk will end up with no milk to sell

Its like in all totalitarian and state run enterprises, they pretend to pay and the workers pretend to work. So if Hugo Chavez thinks that by expropriating the milk producers, he will create a better supply situation, then he is in cloud cookoo land.

Read and wonder at the continuing economic illiteracy.

The Venezuelan president has threatened to take over farms and milk plants if owners refuse to sell their milk for domestic consumption and seek higher profits by selling overseas instead.
If necessary the army would be deployed in order to expropriate farms and deal with milk shortages, Hugo Chavez said on Sunday.

All this to be taken with a grain of piquant salt!!!

A full tank of gas for the price of an icecream

read and weep!

There is a world where oil costs $100 a barrel, where motorists wince as they fill up the tank and where energy efficiency is a mantra.

And then there is Venezuela. At a Caracas petrol station last week, Gloria Padron, a paediatrician, ticked off items that would cost about the same as the 60 litres of fuel gurgling into her Land Cruiser.

"Let me think. A Magnum ice cream. A cup of coffee. A cheese and ham arepa [sandwich]. Small stuff like that. Can't say I've ever really thought about the price. Why would you?"

When a litre costs 0.7p, and filling the tank of a 4x4 costs 42p, it is a fair question. Petrol is so cheap here - reputedly the cheapest in the world - as to be almost free. Even under the artificially overvalued official exchange rate, petrol is 45 times cheaper than in Britain.

Technorati Tags: Venezuela,Oil and Gas,Subsidies

There is a case for subsidies!

I personally do not like subsidies, they distort markets and and and, the usual economist provisio's. With one exception. When the question is for sheer survival, then subsidies are not just subsidies but humanitarian aid. This is why I am very jaundiced about the agricultural round of the WTO or the debates about child labour which are very sterile, theoritical and do not apply to real world, extreme poverty situations. But read here and consider the case of subsidies.

But remember, subsidies become relatively expensive too soon too fast. And then the usual problems of only few people getting subsidies, too much of deficit financing, etc. etc. happens.

All this to be taken with a grain of piquant salt!!!

The White Elephant Salesman says that White Elephants are good!

The British MP's committee rightfully castigated the UK Government and the EC for wanting to find this white elephant of a public sector behemoth. But never under-estimate the power of the public sector to suck on the tit of the taxpayer. Read this full column in the FT and try to figure out 2 things (1) what's the tangible cost benefit analysis to my tax pounds investment and (2) why did the private sector not invest the money that you have to come to me? No answers!

When will these chaps stop this habit of hitting the taxpayer for elitist projects?

I suppose the writers are totally disinterested observers in this Galileo project?

Read and Weep!

Why the Galileo project must go ahead
By Pierre Bartholomé and Kevin Madders

Published: November 18 2007 17:55 Last updated: November 18 2007 17:55

Galileo, Europe’s answer to the US global positioning system, is in trouble. Finance ministers are squabbling over a €2.4bn ($3.52bn) funding gap after a private consortium pulled out. A committee of British MPs has called for it to be put on ice unless there is a more convincing cost-benefit analysis.

The system was supposed to be available from 2010. Its accuracy would be measured in centimetres, not metres as with GPS, and visibility would improve – making it perfect for aircraft and other purposes, adding up to a huge civilian market. But GPS III, due in 2012, will also be more precise and reliable. So, if Galileo comes on line only around 2013, as present estimates suggest, it will not be able to steal a march on GPS.

Given the strength of the case against, it is hardly surprising to find ministers tongue-tied when defending Galileo. However, we believe Europe should go ahead with Galileo – but only under certain conditions.

Galileo is a technological place-marker. Have it, and you will be a leader in understanding and exploiting the potential of one of the biggest technologies to have arisen in the past 50 years. Shun it, and you will end up less well equipped to reap the benefits of positioning from space.

It is true that investing only in applications, not the system itself, could produce some of the benefits. But not all. There is no substitute for knowing a fundamental tool such as this one inside out, for the simple reason that we do not know many of the applications yet. The best way to make the innovative jump comes from making and then running the system.

There is no doubt Galileo can fulfil this role. It is superbly designed. We do not think it necessary for Galileo to be better than GPS III. It needs to be equivalent, so that Europe is in the game. If it stays out now, it will be much harder ever to get in, because this is technology that evolves rapidly.

There is also the chance that the additional services – for example, early warning of failure for safety-critical users such as airlines – will pay handsomely. The market is there. But this is not really the point when one enters a world game such as this. Contrary to what the UK House of Commons transport committee’s report suggests, not much trust can ultimately be placed in mere cost-benefit analysis with fundamental ­enabling infrastructures of this kind. Such analysis tends to be too crude because hard data are necessarily unavailable.

It was for the same reason that the UK could not see the value of communications satellites for Europe in the 1970s, which in fact turned into a ­powerful market for applications such as television and the internet.

Spatial positioning technology is in the same league as previous fundamental technologies, such as transistors, computers and mobile phones. We must get on with making sure the chances can be seized.

However, there are many ways ­Galileo can come unstuck, especially managerial and political. It is essential that delays are minimised. The system’s design should not be tampered with to play catch-up with GPS, for example, or downgraded as suggested by the transport committee report.

The European Commission must assume clear ownership and top-level management responsibility, and equip itself to exercise the role of supremo effectively. All those involved will have to allow it to meet its targets, working with and directing the European Space Agency as prime contractor.

European Union member states must resist the temptation to interfere in the project once it kicks off anew. On the Commission’s side, it needs to be more pragmatic about allocating work between countries. The normal rigours of open competitive bidding will ­probably have to be relaxed for this case. The Commission should aim for a compromise.

Policymakers need to stop duping themselves and others: it is idle to assume commercial revenue will cover all operations costs. The EU must plan for a sustaining budget. However, it should also look at the merits of slicing up and auctioning individual Galileo commercial services as the market ­ripens. The EU should guarantee far better transparency.

If ministers endorse a Galileo reorientated on these kinds of premises, it can turn the system into an asset for the citizens and security of Europe.


Mr Bartholomé, former head of the European Space Agency’s satellite communications design team, and Mr ­Madders are partners in the consultancy, Systemics Network International. Tony Ballard of Harbottle & Lewis also contributed to this article


All this to be taken with a grain of piquant salt!!!

A Muslim Car????

Another state owned firm tries another wheeze to make fools of its customers and enrich the politicians. Welcome, Sir, would you like a Muslim Car? I sometimes think that their brains have dribbled out.

Read and poke fun at these stupid corrupt carmakers who will now wrap the car in religion!

 

Malaysia firm's 'Muslim car' plan

Proton believes it may have found a huge gap in the market

The Malaysian carmaker Proton has announced plans to develop an "Islamic car", designed for Muslim motorists.

Proton is planning on teaming up with manufacturers in Iran and Turkey to create the unique vehicle.

The car could boast special features like a compass pointing to Mecca and a dedicated space to keep a copy of the Koran and a headscarf.

The idea came during a visit to the Middle East by a delegation of Malaysian politicians and businessmen.

Malaysian press reports say officials in Iran originally suggested the idea.

Safety features or fuel economy is one way of selling a car, but Proton thinks vehicles designed specifically for Muslims across the world represent a huge gap in the market.

Proton is the most dominant car on the streets here but the company has suffered recently after the government allowed more foreign cars to be imported.

The firm has been in talks recently with VW about a takeover by the German car giant.

Technorati Tags: Malaysia , Muslims , Subsidies , Public Sector

Subsidies are only for rich people!

I hate subsidies, they never work, they distort the market, they provide very short term palliative care for a certain section, very very rarely are useful for the overall economy and live on forever and I have moaned about this earlier!

But see this story. Agricultural subsidies in the EU are directed to the richest, not the poorest. I quote:

Disclosures over the past two years have shown that Britain's elite
landowners harvest the lion's share of farming subsidies – a consistent source
of embarrassment for the EU's farm policy which is supposed to provide a
reasonable standard of living for poor farmers struggling to compete in the
global market, not redistribute taxpayers' money into the hands of a few
millionaires.
"This is a largely symbolic proposal but it will hit the pockets of
major landowners and that includes people like the Queen," said Jack Thurston,
co-founder of farmsubsidy.org which campaigns for greater transparency over
payments. "We've known for a while now that roughly 80 per cent of the CAP goes
to the richest 20 per cent of farmers. Those who benefit from subsidies the most
have never been the poor struggling farmer."
The proposal, being drawn up by the European Commission, is the first
attempt in years to tackle the scandal of giant agri-businesses and millionaire
barley barons – as opposed to smallholders and family farmers – being the chief
beneficiaries of the Common Agricultural Policy. The plans, due to be submitted
for consultation with EU member states on 20 November, will suggest that some of
the largest payments to super-rich landowners and industrial farms could be
reduced by as much as 45 per cent.

So anything that reduces this horrendous misallocation of funds is to be welcomed. Mind you, this is just the proposal. Then the bloody politicians will get involved. Its like the difference between what's in the seed catalogue and what actually comes up!



All this to be taken with a grain of piquant salt!!!

The strange case of Mad Dogs and BioFuel Subsidies - absolutely bizarre!

I moaned about the wrongfully applied subsidies on oilseeds and biofuels making foodgrains expensive for the poor across the world.

Further to that, see this oped from Martin Wolf, absolutely brilliant, read and weep!

Energy security and climate change are two of the most significant challenges
confronting humanity. What we see, in response, is the familiar capture of policy making by well-organised special interests. A superb example is the flood of subsidies for biofuels. These are farm programmes masquerading as answers to energy insecurity and climate change. Not surprisingly, they have the depressing characteristics of such programmes:high protection, open-ended support to producers, and indifference to economic rationality.

Already the support in members of the Organisation for Economic Co-operation
and Development costs about $13bn to $15bn a year. But this sum generates much less than 3 per cent of the overall supply of liquid transport fuel. To bring the biofuel share to 30 per cent, as some propose,would cost at least $150bn a year and probably more, as marginal costs rose.Someone needed to take a close look at the rationality of all these supports. An excellent report from the Global Subsidies Initiative of the International Institute for Sustainable Development does just that*. It does not tell a pretty story.

Policy is extraordinarily complex. It can also be highly irrational. Brazil is, for
example, the most efficient supplier of bioethanol, but confronts tariffs of at least 25 per cent in the US and 50 per cent in the European Union. A smaller example is the advantage given to production of“flexible-fuel vehicles” in US corporate average fuel-efficiency standards.Because the fuel-economy credit is biggest for the least energy-efficient models, manufacturers concentrate on sport utility vehicles and light trucks. Yet almost all the drivers of these vehicles use ordinary petrol.The result is greater consumption of petrol, not less.The cost of support per litre of ethanol varies between $0.29 and $0.36 per litre in the US and $1 in the EU (see chart). Support for biodiesel varies between $0.2 per litre in Canada and $1 in
Switzerland.

But the cost of petrol, in terms of equivalent energy units, is $0.34 and of diesel is$0.41. Thus, the subsidy to biofuels is often greater than the cost of the
fossil fuel equivalent. Not surprisingly, the production costs of subsidised biofuels are also generally much higher (see charts).Does this costly shift to biofuels at least deliver reductions in net emissions of greenhouse gases? Not by as much as one might suppose, is the answer. The net greenhouse gas emissions of expensive European rapeseed oil-based diesel are a mere 13 per cent less than those of conventional diesel. Similarly, net emissions from US corn-based ethanol are only 18 percent less than conventional petrol.

All this to be taken with a grain of piquant salt!!!

The natives are restless at the thought of feeding the European White Elephant

I spoke earlier about Galileo, the great white shining hope of the European bureaucrats to pip the Americans at their game of international satellites and global positioning systems. Now the FT is reporting that the funding for this white elephant is in danger. As I mentioned earlier, they were going to take money from the other white elephant, CAP, and plonk it into here. Why? Why aren’t you returning that money back to me, the taxpayer? Typical, very quick to tax, very very slow to return it or show any returns for it either.

I quote:

The future of Europe’s rival to the US global positioning system was in doubt on Tuesday after transport ministers bickered over how it should be funded. Germany, the UK and the Netherlands rounded on a European Commission plan to raid farming subsidies to build the €3.4bn ($4.8bn) Galileo satellite navigation project.

All this to be taken with a grain of piquant salt!!!

Increase emigration by paying people to leave?

Now this is very interesting indeed. If you are seeing people leave a region/state/country, then you might as well as pay them to leave completely. Makes economic sense, because provision of services, infrastructure, etc. becomes progressively more and more expensive as there are lesser and lesser people to fund them. So? the proposal is to empty out the place and convert the place into a forest! Makes very good sense indeed.

See here for an example in Germany.

SPIEGEL ONLINE - October 2, 2007, 12:33 PM
URL: http://www.spiegel.de/international/germany/0,1518,509043,00.html
LOCAL FURY AT CONTROVERSIAL PROPOSAL
Cash Offer to Speed Up Eastern German Exodus
By Marie Preuss
Not everyone is celebrating German Unity Day, Oct. 3, the anniversary of reunification in 1990. Migration has left large parts of the east deserted and crumbling. A study proposes speeding up the process in worst-hit areas by paying the remaining population to leave.
People have been leaving eastern Germany in droves since reunification.
DPA
People have been leaving eastern Germany in droves since reunification.
As long as he lives, Horst Müller, 74, won't leave his home in the village of Letschin in the eastern German state of Brandenburg which surrounds Berlin. "They'll have to carry me out of here feetfirst," says the farmer who has been living in his large house for almost 40 years with "the wife," two sheep, cats, chickens and two horses.
If the Berlin Institute for Population and Development had its way, the Müllers would soon be moving out. And they'd be paid to go. The institute was commissioned by the regional parliament of Brandenburg to conduct a study on demographic change in the eastern state, and has come up with the idea of paying citizens to move away from the most deserted areas and thereby establish some sort of control over the alarming rate of depopulation that has struck the region since reunification 17 years ago sparked an economic upheaval.
Ever more schools are being closed down; housing estates and villages are becoming deserted. The study estimates that by 2030 a third of Brandenburg's population will be older than 65. That figure already stands at 20 percent. By 2030, some 470,000 will have moved out of the state compared with 2004, to jobs in the west of Germany or in more prosperous parts of the east. The region's infrastructure is already crumbling. In many areas the sewage system has fallen into chronic disrepair and there aren't enough doctors to provide emergency medical care.
A total of 173 positions for general practitioners are vacant. By 2030, many rural communities won't have a doctor, the institute warns.
Transformation into a Wilderness
It proposes massive investment in the education system and in old people's homes and to turn thinly populated areas back into a scenic wilderness. One day, wolves and foxes should prowl where Müller spent his life breeding geese, growing asparagus and planting pumpkins.
PHOTO GALLERY: MIGRATION LEAVES EASTERN GERMANY DESERTED
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Click on a picture to launch the image gallery (5 Photos)
Not surprisingly, the study has sparked controversy. "It's relatively gaga that the government should presume to take such decisions affecting people's quality of life" said Peter Hettlich, a member of the federal parliament for the opposition Green Party. Old people had a right to live out their days where they grew up, he said.
All the government has to do is make clear to them that they can't expect big-city standards of medical care if they live 30 kilometers from the nearest doctor, said Hettlich.
The emigration is hitting Letschin hard. By 2020, its population will have shrunk to 3,000 from today's 4,800, says Mayor Michael Böttcher. "At least we've still got a school though," he added, staring out of his office window at horses grazing in a paddock.
Between 1994 and 2003 a total of 149 primary schools were closed in Brandenburg, almost a quarter of the total. As a result, the commute to the nearest school is getting longer and longer.
'Like Being Driven Out of Paradise'
But Böttcher dismisses the proposed emigration premium as "forced resettlement." He said the thought of leaving his home region fills him with "inner pain." "It's like being driven out of paradise," he said clutching his chest.
Ten kilometers down the road, in the village of Gusow, baker Edeltraut Studier, 47, shares the mayor's view but is a little less emotional about it. "It's no better in the west," she says arranging plum cakes and strawberry tarts in her shop window. She has been running the bakery for the last 20 years and wants to keep on doing so for the next 20.
In Gusow, renovated homes stand alongside crumbling ruins. "There used to be great parties in the festival hall at the end of the street," she reminisced. These days the building is falling into ruin, its windows smashed and its walls daubed with Nazi swastikas.
The idea of actively depopulating large swathes of eastern Germany is meeting with stiff resistance among local people. The Berlin Institute study's assessment that agricultural areas were lying fallow is "total nonsense," said Mayor Böttcher. "I think we'll be able to manage without subsidies in 15 years' time," he said, adding that rapeseed oil cultivation could lead to an economic revival of the region.
But Berlin Institute Director Reiner Klingholz is adamant that the region is in steady decline. Moose have begun wandering around rural parts of eastern Germany, he says. Andreas Weber, one of the authors of the study, said at least 9 percent of farmland has been taken out of agricultural production with the help of EU subsidies.
Back in Letschin, Horst Müller's sheep are bleating and his black cat Morle is rubbing against his leg. "Is there anything more beautiful?" He gets up to gather up the grass he has just mown. Then it will be time for coffee. "I've already done enough in my life," he says, and walks into his garden.

Technorati Tags: Germany , Emigration , Subsidies

The EU's sugar policy is also a total mess

I talked about the EU's fisheries policy being a mess, its regulatory impact analysis regime being totally unfit for purpose and now as it turns out, its sugar policy sucks. The FT reported:

Relations between the European Union and its former colonies soured further on Wednesday after Brussels was accused of “coercion” for planning to scrap a 30-year-old deal on sugar imports while talks continue on its replacement.

The European Commission said scrapping the measure by October 2009 was vital to ensure duty- and quota-free access for all 70-plus African, Caribbean and Pacific (ACP) countries when new EU trade rules came into effect.

The preferential access regime was ruled illegal by the World Trade Organisation, and a waiver granted in Geneva expires at the end of the year.

The EU is also struggling to remove 6m tonnes of domestic production by 2010, when the cut takes full effect, to bring European prices closer to world levels.

The road to hell is paved with good intentions, and this is what the pathetic EU subsidies have done to the 70 odd ACP countries (mostly African and Caribbean). It has made them dependent upon feeding on the public trough and left them indolent. Rest of the sugar producing countries managed to become more efficient and produce sugar with less effort and less cost. So now the situation is that the EU is struggling to reconcile its finances, its commitments to its previous colonies and its commitments to the WTO. I love it, couldn't have happened to a better organisation. Again, violate the laws of economics at your peril, you ignorant twits!

Technorati Tags: Europe , European Commission , WTO , Farming