9 October 1998

Will history repeat itself?

Theres a chilling similarity between the current state

of farming and the fix it was in in 1869, explains

EYorks farmer Jack Caley

THERE is a fashion today for politicians seeking populist support to issue clarion calls for the reform of the CAP, as though, just like every new generation they had suddenly invented original sin.

They may be disappointed to learn that just as what occurs behind the mulberry bushes is not new, neither is the call for reform. We have today a situation surprisingly similar to the era of the abolition of the Corn Laws, in the nineteenth century.

Government interference in agriculture and the production of food is not a new thing, and for good reason. I have an encyclopaedia published in 1883, which outlines the history of trade protection of food supplies throughout history and the controversy surrounding it.

The introduction to the subject is in itself quaint and amusing, but very illuminating: "An adequate supply of grain for bread is evidently of the very first importance to every country, and should be as regular as possible, since sudden fluctuations in an article of so universal necessity are injurious, and scarcity, with the consequent high prices, brings distress upon the poorer classes, and is a fruitful cause of discontent and convulsions."

It also goes on to state: "The best means of securing a sufficient and steady supply of this article has been a subject of great diversity of opinion, and the practice of governments has varied much at different times." Sounds familiar?

The theories of Adam Smith, ie free trade whereby the merchants and farmers will form the correct view, and "their interest will coincide with that of the community" are debated against the need for government support.

The very first interference was in ancient Greece, followed by Rome, which merely prohibited exports. This practice, as with all political acts, was counterproductive, in that it depressed the price to the producer, who reacted accordingly, did not produce and famine followed.

The same thing occurred in this country after the Norman Conquest with exactly the same result. Exports to Calais were, however, resumed in 1360 but true protection started in 1463. Henry VI permitted the export of wheat provided the price did not exceed six shillings and eight pence per quarter (barley 3s/4d). This could be regarded as the very first standard price. Various Acts were passed as time went on; Henry VIII permitted export by licence, Elizabeth I put a duty of one shilling per quarter on wheat and sixpence on barley.

William and Mary had the doubtful distinction of paying the first export restitution, or bounty as it was then called. A bounty of five shillings was paid on a quarter of wheat provided the price of wheat did not rise above 48 shillings on the home market. This system stimulated the export trade to a very substantial degree, even by todays standard. In 1750 we exported 330,000 tonnes of wheat. The subsidy paid between 1731 and 1740 was £1.5m, paid by the government.

However a change was to take place with the industrial revolution. We no longer exported grain, but became importers, hence the onset of the notorious Corn Laws. It was realised that the home producer had to have protection in a high-cost economy, as is the situation now. Therefore different laws were enacted. The bounty payment was abolished and there was even a ban on exports again!

The Corn Laws became more sophisticated to control supply and demand, with the use of standard prices, tariffs, duties and even prohibitive duties if the internal price fell below certain levels. A duty of 24 shillings and 3 pence was placed on imports if the price of wheat to the English farmer fell below 63 shillings. These complicated means of controlling prices persisted even through the Napoleonic wars when the price of wheat rose to an astronomical 80 shillings per quarter or £16/t.

Persistent opposition from the Anti Corn Law League to this regulation of supply and demand (the prices fell sharply after the war) did succeed in that in 1846 the duty on importation was removed, leaving only a nominal duty of one shilling. By 1869 this duty was abolished and the Corn Laws were no more. Free trade reigned.

The history of the Corn Laws also tells of corruption of the trade. "In addition to the restrictions upon the foreign trade in corn the inland trade was subjected to an interference of the most mischievous kind, dating from a period at least as early as the regulations affecting exports and imports. Fictitious crimes called forestalling, engrossing and grating were created and heavy penalties inflicted, under pretence of them, on the buying and selling of corn".

The fact remains that due to political pressure the Corn Laws were abolished, a very similar situation to today with calls for the reform of the CAP.

Many farmers would also like to see the end of the stigma of subsidies. We have a public who have for so long been indoctrinated by politicians and lobbies. If all these people had a better understanding of the origins and needs which created government interference we might not see the repeat of the Repeal of the Corn Laws which resulted in eighty years of rural poverty and a nation which could not feed itself during a world war.