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Snooth User: Philip James

Turning wine into water

Posted by Philip James, Jan 28, 2008.

I've spoken about the glut of wine across the globe, with billions of bottles being destroyed annually. And, if I didn't do it then, I should say it again now, its government subsidies that cause this mess. I know its a complicated issue, but people's hard earned tax money, not only goes to support hard working farmers (we can debate subsidies in general if we need to), but worse, to first subsidize the growing on unneeded grapes and then to subsidize the expense when they either gets destroyed or distilled into fuel. At that point it would probably be cheaper just to pay the farmer to leave their fields fallow.

My proposed solution back then? Easier said than done, of course, but it's simply to grow good grapes. Don't forget, its not Opus One thats being turned into gasoline, but rather some industrial strength bulk wine that no one is willing to buy.

Well now, in a perverse twist, yet again caused by subsidies, the growers have another option.

California is suffering such a water shortage (its now illegal in Long Beach, CA to serve a glass of water in a restaurant unless the customer asks for it first), that farmers can profit by reselling their water supply at up to triple the rate. As a capitalist, that sounds great. Farmers own valuable asset / people wish to buy asset / farmer sells. I don't blame the farmers, at this stage in the game its silly not to sell it. The problem is the mis-aligned incentives these subsidies cause in the first place.

Now we have municipalities, in dire need of water, paying more than they'd have needed to otherwise. The local residents will have to cover these extra expenses through extra taxes. Which considering it was their taxes that funded the subsidies in the first place doesn't really seem all that fair.


Reply by Mark Angelillo, Jan 28, 2008.

Double taxation on basic daily utilities with no recourse! Sounds like a perfectly optimized system to me...

Blog comment by Victor, Feb 4, 2008.

Wow! So if the Holy Bible would be written now in Ca, then Jesus would turn wine into water? What kind of world are we living in?

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