The US Should Abolish Agricultural Subsidies
The US should abolish agricultural subsidies
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Government intervention in the marketplace contradicts the values of free-trade advocated by the USA...
Government intervention in the marketplace contradicts the values of free-trade advocated by the USA. Our complex series of agricultural subsidies, price supports, regulations and protective tariffs means that farming in the US functions as a command economy - in effect, we have a socialist agricultural system. Furthermore, such subsidies violate international agreements negotiated and signed by the US, such as the World Trade Organization, and the North America Free Trade Act (NAFTA). This tarnishes US credibility.
A subsidized farming industry helps to create the most stable farming infrastructure possible. Agricultural commodities are subject to great swings in price due to weather conditions and market volatility. Without government support to smooth the impact of market fluctuations, huge numbers of American farmers would be pushed into bankruptcy, forced off the land and into dependence on welfare. This would have knock-on effects on the whole economy of the US heartland, and would devastate the social structure of small-town America. Unless the United States is happy to stand by while this happens, we must continue to support farm programmes which guarantee farmers a decent return on their labor and give American agriculture a secure future.
Subsidies are expensive and represent a burden on the American citizen as taxpayer and consumer. Th...
Subsidies are expensive and represent a burden on the American citizen as taxpayer and consumer. The USA spends $44 billion on farm support payments every year, all of which comes out of the pockets of hard-pressed American families. Factory laborers or service-sector workers don’t get such state hand-outs at public expense - why should farmers?
For the reasons given above, market prices for agricultural produce can vary greatly from year to year. Without government support to smooth out fluctuations, consumers would sometimes be faced with price spikes when harvests were poor (or because many farmers had been driven out of business, reducing supply). As family income is pretty fixed, price spikes for basic foods such as bread, breakfast cereal, meat, beans, dairy products and even beer could really affect the standard of living enjoyed by many Americans. Even if such high prices only occurred occasionally, their possibility would create general uncertainty about future levels of disposable income. This could be very damaging to consumer confidence, and so to the economy as a whole.
Subsidies cause poverty, both domestically and internationally by maintaining the prices of goods at...
Subsidies cause poverty, both domestically and internationally by maintaining the prices of goods at an artificial level that does not reflect the cost of production. When these subsidized exports compete on the global market, agricultural companies can sell product for less than production cost. For example, the onion industry in Jamaica once thrived on the domestic level. However, thanks to the artificial economics created by US subsidies, American corporations have flooded the Jamaican market with cheap produce and put the local onion producers out of business. \
Artificial pricing also slants international trade against farmers in poor countries. For example, it is much cheaper to grow cotton in West Africa than in the USA. This should enable West African farmers to export their cotton profitably, to the benefit of both themselves and their countries’ developing economies. However, American subsidies encourage overproduction in the United States, and allow US cotton farmers to sell their fiber abroad at a discount. Both these effects drive down the global price of cotton and remove the best chance the West African states have of trading their way out of poverty. \
The United States is not responsible for the international poverty caused by agricultural subsidies. Even if the USA were to stop funding its farming industry, other developed nations practices would continue to distort international markets. The European Union subsidizes its own farmers $100 billion annually for produce exports, compared to only $44 billion in the USA. Farmers in both Norway and Switzerland receive approximately 70% of their farm revenues from government payments, compared to less than 20% for US farmers. Japan protects its farmers with a whole array of nationalist subsidies and tariffs. Any unfortunate effects on small country farmers will not cease if the United States were to abandon its subsidizing practices. Indeed, the USA’s share of world food exports has been either flat or falling for over 25 years, so it is unfair to blame US agricultural support programmes for the current problems of developing countries.
Subsidies are bad for the environment for three reasons. First, because whenever local producers ar...
Subsidies are bad for the environment for three reasons. First, because whenever local producers are put out of business, as in the case of the Jamaican onion growers, that country is then reliant on imports for produce previously available domestically. Local produce is always going to be more sustainable than imported produce, which inevitably involves many air-miles and needless pollution.\
The second reason subsidies harm the environment is because they encourage large-scale production of specialized produce, known as monoculture. Monoculture is when enormous amounts of land are devoted to one single crop, e.g. wheat, maize or soybeans. This is bad for the land because it absorbs from the earth all the nutrients necessary for that crop, rapidly exhausting the soil. Monoculture is encouraged by our present system of subsidies, but damages the environment which makes this practice unsustainable without the enormous application of artificial fertilizers, which are both wasteful in terms of the energy required to produce them, and damaging to the environment in terms of water-pollution from run-off.\
Third, subsidies encourage intensive agricultural production in unsuitable areas. Examples of this include the ploughing up of prairie areas naturally better suited to pastoral grazing, and the cultivation of water-intensive fruit and vegetables in naturally arid areas of southern California that requires wasteful and environmentally damaging irrigation schemes to be viable.\
Food is a unique good in the sense that it is essential to sustain life. The government should not gamble on this important industry surviving such elements as a fluctuating market-place and environmental change without federal support. Federal agricultural programmes are necessary to promote American self-sufficiency in food stuffs - vital for national security and the well-being of a country’s citizens. During a time when the US is involved in a massive ongoing war against terror, this food security is imperative. Subsidies are also helping us to make progress towards another form of self-sufficiency, as federal support for ethanol production (largely derived from maize grown in the US cornbelt) is contributing to reduced dependence upon imported oil.
Reform will never effectively turn the tables in subsidy distribution. Large-scale agri-businesses ...
Reform will never effectively turn the tables in subsidy distribution. Large-scale agri-businesses have the power to manipulate policy through lobbying and campaign contributions in order to ensure they can maintain their comfortable government issued subsidy. Small family farms cannot compete with these rich agro-corporations, who can spend millions of dollars lobbying to stop legislation that would reform current problematic subsidy expenditures. This is exactly why the Grossley-Dorgan Bill was never enacted and implemented. As any system aimed at channeling federal money to agriculture will be open to these abuses, it would be far better to end subsidies completely, supporting poorer farming families instead through welfare benefits and tax credits.
Even adamant anti-subsidy advocates agree that abolishing current financial assistance will not be beneficial in the end. Reform of current subsidizing policies is better than eliminating it altogether. Small farmers are in dire need in the USA, and eliminating the percentage of their income derived from federal support would have devastating effects to the smaller American farms. Legislation that has been tabled such as the Rural America Preservation Act and the Grossley-Dorgan Bill needs to be passed. These and other policies would help by capping the amount given to the largest agricultural corporations, and fix the loopholes that allow them to receive unjust amounts of the subsidy pie. These policies will also help conservation and preservation of pristine natural resources, while keeping current farmland healthy, but not encouraging monoculture, something current subsidies do.
Domestic subsidization of agriculture harms international human right to livelihood. Agriculture is...
Domestic subsidization of agriculture harms international human right to livelihood. Agriculture is the backbone of most developing countries, and ranges from 50%-80% of their economy. In contrast, the USA relies on agribusiness for a mere 1.5% of its economy. If 50-80% of the businesses of a poor country are unable to sell, they are unable to spend, which further exacerbates their financially conundrum. In turn, subsidies deny livelihoods abroad by not allowing local farmers a chance to compete on the market, whereas before subsidies they would be able to, and also since the farmers (50-80% of the economy) have no income, they are being denied the ability to afford education and other job opportunities. Even more negatively, denying poor farmers a legitimate living will only encourage some of them to turn to illegal crops, such as coca and opium poppy, instead.
American food subsidies are actually good for the developing world. The kinds of food stuffs which are exported to the poorer countries are staples like wheat, maize, milk products and sugar. Our subsidies ensure that these basic foods are available more cheaply to consumers in poor countries than they would be otherwise, so their limited incomes can go further and they can eat better. Nor are these exports undermining local producers - often the produce we sell in the developing world grows better in the USA than it does in their local conditions. And in any case, the key to their development doesn’t lie in producing such capital-intensive commodity crops, but in exporting labor-intensive produce in which they have a comparative advantage, such as prepared vegetables, palm oil, cut flowers and cocoa.
Unless the United States moves to end agricultural subsidies, there is no chance that a global trade...
Unless the United States moves to end agricultural subsidies, there is no chance that a global trade deal can be struck. Already the Doha round of the World Trade Organization (supposedly a priority for the Bush Administration) is years behind schedule, stuck in acrimonious bickering between the US, the EU and a developing world bloc. Any deal will require developed countries to greatly reduce their agricultural protection, including subsidies to their farmers, in exchange for market opening for a wide range of goods and services worldwide. Such a deal is hugely in the wider economic interest of the United States, as more open markets would allow American companies to compete more effectively in many countries where tariffs and other protectionist barriers now restrict them. By promoting greater prosperity in the developing world, it would also benefit the United States, as wealthier consumers will wish to buy high-value goods and services from US companies, boosting our own prosperity in turn. Such a prize is within our grasp, but it will require brave leadership from the US administration.
Agricultural producers in the USA recognize the gains that could be made in a successful Doha round, but there are also risks to be considered. Any worthwhile deal would have to balance the loss of income to farmers (through a reduction in federal support for agriculture) with the profits to be made through increased exports as tariffs fall internationally. Such a deal cannot be achieved if the US administration “gives away the farm” by unilateral cuts in farm support - such a move would remove any leverage the USA has in the negotiations and would provide no incentive for our competitors to reduce their own subsidies and tariffs. Our best position is to keep our existing programmes of agricultural support until other countries make binding commitments to a WTO settlement from which all can benefit.
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