Yves here. One issue is that cows are subsidized.
One of my readers’ ancestors come from the Aran Islands, in Galway Bay in Ireland. He has described them as beyond dirt poor, as in they had to import their dirt.
In the late 19th century, the Aran Islands had a status like that of Nepal, as in they were seen as impoverished but spiritual, as well embodying a then-older version of Irish culture. Aran Island was particularly popular with writers, and one source of income for the locals was taking in visitors as boarders, since there were no hotels.
When this reader went to visit a family homestead, which has some cachet by virtue of having hosted John Millington Synge, among other, he noted how the houses for sale, which in most cases seemed an awful lot like huts, had eye-popping asking prices. He asked what people did for a living. The answer?
“They have a cow.”
Indeed, the island was for the most part divided into quarter acre plots separated by stone fences, with a cow in each. Apparently that was enough to qualify them as farms and allow them to get subsidies from the EU.
By Barkley Rosser, Professor of Economics at James Madison University in Harrisonburg, Virginia. Originally published at Angry Bear
What is it with cows? I mean their flatulence does add to global warming, but they seem so benign, chewing their cud while producing milk and meat. Why is it that national leaders get into fits of backstabbing over them, or especially over all that milk they produce?
Well, of course, that is it; they produce a lot of it, and a variety of products come from the milk, which sometimes markets do not want as much of as some of the other products. This is probably the main reason that in international trade agreements, where highly protected and subsidized agriculture is always a difficult topic, dairy products are often at the top of the list. For years, the predecessor of the EU, the EEC had “butter mountains” from all the excess butter governments bought to stabilize the market and keep the Danes and the French from stabbing each other in the back too viciously. The US also had a butter mountain problem for a long time, much of it stored in Madison, Wisconsin where it caught fire back in 1991 and burned for 8 days. Yes, we must protect those Wisconsin Dairy State cows as Trump is struggling to dop!
Back in 1972, when I was a grad student at U of Wisconsin, then Wisconsin Senator William Proxmire thought briefly of running for president (he didn’t in the end) and showed up at the econ department one time to give a speech. For those who do not know, he was very popular and although a Dem had a bipartisan appeal. A major part of this was a reputation he had for being very clean and not taking money from special interests. He had an image of saving taxpayers money as he handed out “golden fleece” awards to people or entities he determined were wasting public funds. So, of course, in his speech “The Prox” went on and on about all his money saving efforts. At the end one prof asked him, “Senator Proxmire, if you are so much for efficiency and saving money, why do you support dairy import quotas?” To this The Prox just smiled and said, “Well, after all, I am the senior senator from the state of Wisconsin.”
As it has been in Europe, so between the US and Canada since NAFTA a handful of commodities have off and on been the center of trade disputes, with restrictions holding on both sides. Lumber and dairy have probably been at the top of the list, althought technically dairy is outside of the NAFTA. As it is, both sides have heavily subsidized and protected dairy in various ways. Nevertheless, based on rising exports of ultrafiltered milk that can be used to make yogurt and cheese from the US to Canada, the US has managed to build up a $400 million annual surplus in dairy products trade (which has decreased slightly). Last year the Canadians reacted to that and engaged in a reclassification of that type of milk and made changes in their internal pricing, which has led to a decline of exports of this product from both New York, home of Senate Dem leader Schumer, and from Wisconsin, home of House Speaker Ryan. Ah ha, even thought the US dairy trade surplus remains substantial, this is clearly a stab in the back!
So now Canada is the worst enemy of the US and its leader deserves to go to hell, although the now heart-attack-stricken Lawrence Kudlow suggested that perhaps Trump engaged in his tough rhetoric and refusal to sign the G-7 communique after he left to show Kim Jong-In he is a tough guy, able to beat up on the oh so polite Trudeau who refused to buckle while protecting his cows. Oh, once again those apparently benign beasts have shown us how truly dangerous they are, weapons of mass destruction for sure.