No Smoke without Cash Apr02

Over 100,000 tobacco farmers in the EU (60,000 in Greece, 27000 in Italy and the rest in France and Spain) receive £620m in annual subsidy from the Common Agricultural Fund! The livelihood of these farmers, family members, their employees, including casual labourers, depends on the EU subsidy for tobacco, the major crop where they live. Politicians in these countries claim that these hundreds of thousands of people live in sensitive areas (e.g. northern Greece bordering with the Balkan states) and the subsidy, only 2% of revenue collected in taxes, is a small price to pay for political stability in the regions concerned.

Tobacco, like coffee and cocoa, is a cash crop grown in many developing countries. The growers earn little and the prices have not risen for years. A typical tobacco grower in Africa or Asia receives about £1.40 per kilo for his leaf realising a profit of £0.70. This 1Kg of leaf would produce 1000 cigarettes such that the cost of the leaf in a pack of 20 cigarettes is a mere 4 or 5 pence, just 1% of the retail price! The Government’s tax, including VAT, is 80% and the remaining 19% covers production cost, huge advertising expense, marketing & distribution costs and the profits of manufacturer and distributors.

If tobacco can be grown without subsidy by developing countries then why do we offer support for its production in Europe? If the subsidy is to maintain political stability in sensitive regions of Greece, Italy, France and Spain then why is the EU not offering a similar subsidy to farmers in Northern Ireland for their crops? The EU should stop being a nanny state and encourage free enterprise. The EU should invest in re-training and re-deployment of labour to encourage a shift of employment from the unproductive labour intensive enterprises to high tech enterprises producing value added goods. In any case, why should heavily taxed British smokers subsidise Greek, Italian, French and Spanish tobacco growers who pay so much less to smoke in their countries?

The EU collects £30bn each year (UK about £3bn) from taxes on sale of tobacco products in its 15 Member States. Clearly, no Government in Whitehall will be “tough on tobacco sales” as so much revenue flows into the treasury without much public protest.

Therefore, we subsidise EU farmers to grow tobacco. Tobacco companies spend a fortune on advertising to encourage us to smoke. Our Government uses our taxes to campaign against smoking and to treat smokers in hospital when they suffer from smoking related diseases! We accept, without much fuss, the death of 500,000 Europeans from smoking related diseases each year!

No wonder the taxpayers and electors of Europe have little confidence in their politicians!