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!
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