Wednesday, 12 August 2015

No Use Crying Over Spilt Milk Profits

I really do despair of some people - to be precise 46,899 people (the current number of signatories for this daft petition to introduce minimum milk prices to artificially support milk producers in our farming industry).

There are some things that are so mind-boggingly obvious that it truly beggars belief to see so many  people not getting it. There is a very good reason why the market prices milk at lower than what many UK farmers can charge - it is the same thing, nothing new - that there is an over-abundance of milk suppliers in the global market, which means a superfluity of production compared with number of consumers. 

That UK farmers are being priced out is a clear signal that some of them need to produce more of other goods, or perhaps even try their hand at something different. The very fact that someone in business needs subsidising is all the indication one needs that the business is not doing as well as competitors, and that's true of milk production, stationery, airline flights or clothes selling.

Minimum milk pricing is one of the craziest ideas you'll see; it helps British farmers and hurts just about everyone else, including consumers enjoying low prices. That there are currently 46,899 people oblivious to this most basic Econ 101 exercise is seriously worrying.