By responding only to the corporations, the government has signalled that reasoned argument is now redundant. It forces us to become, in other words, the unreasonable people that Jack Straw claims we are. The public hand raised in objection becomes the public hand raised in attack. So if, at the end of this month, protesters seek to break into the Labour Party conference, to overturn the corporate stalls and disrupt the McDonalds reception, it won�t be because, as ministers will doubtless claim, they have no arguments, but because argument no longer works.

George Monbiot�s book Captive State: the corporate takeover of Britain has just been published in paperback by Pan, at 7.99.

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Around 400 of George Monbiot�s essays and articles are now online at http://www.monbiot.com

Agriculture: Small is Sustainable, Big is Subsidised

The Agreement on Agriculture (AoA) and the Common Agricultural Policy (CAP), despite their opposing ideologies of open market and protection respectively, have both led to the promotion of agribusiness and corporate monoculture farms at the expense of smaller biodiverse farms.

The European CAP, drawn up at the Treaty of Rome in 1957, had admirable aims: to prevent food shortage and excessive prices without resorting to overproduction, which leads to lower prices and therefore reduced farmer income.

To achieve this, the CAP set food prices, the intervention price being above the free market equilibrium. The resulting surpluses were bought up by the Intervention Board, which is funded by the European Agricultural Guarantee and Guidance Fund. The surplus is then stored or �dumped� (sold on the world market or given as food aid, often for another commodity, such as in the Food for Oil programme in Iraq). CAP also introduced quotas (e.g. milk in 1984), which restrict the levels of domestic production and imports. The imports are then brought in line with the intervention price, or with the quota produce through customs duties, tariffs or import levies.

Despite the worthy aims of the CAP, backed by over half of the EU budget, in practice, the results are less than admirable; the number of farms has decreased, along with farmers� incomes. Since the CAPs inception, the number of farmers has fallen from 22 million to 7 million within the founding 6 countries of the CAP. In the US, which operates similar policies of protection, consumer prices have increased 3% in real terms, whilst farmers� incomes have decreased by 35%.

These distortions arise because CAP subsidies are linked with production quantity and food type, The preference for large quantities favours large farms, and encourages overproduction. The policy of subsidising certain foods more than others has meant that the richer agricultural regions within the EU receive the lion�s share of subsidies. Import levies on products entering Europe mean that countries elsewhere in the world cannot compete in the European agricultural market. Nor can they compete with subsidised EU exports, which are dumped on the world market in large quantities. Many farmers in developing countries give up agriculture and migrate to overcrowded cities; the result is a drop in agricultural output, which can lead to famine in times of poor harvests.

Export subsidies are also given for the costs of processing, marketing and transporting agricultural goods. Farmers receive none of this; the beneficiaries are the agribusinesses like Monsanto and Cargill. Corporate agribusiness now owns the whole food system, and sells farmers the means of production (tractors, fertilisers) at inflated prices, because there is no real competition. The multinationals also act as retailers, processors and distributors; here again, their size allows them to dictate the prices at which farmers can sell produce. In many cases, agribusiness owns the large farms as well; Lord Hamilton, the government�s �rural recovery co-ordinator� is the head of Northern Foods, which owns a 600-acre farm. Similar subsidies have been described by Peter Rosset of Food First as �basically a transfer of money from the taxpayers to large corporate farmers�.