Sunday, March 20, 2005

The G20 Wants Farm Subsidies Ended

BBC reports that the G20, an organization of 20 developing countries (including India, China, Argentina and Brazil), called on the developed nations to end farm subsidies. Link.
Twenty developing countries have called on rich nations to scrap their farming subsidies within five years.

Brazilian Trade and Foreign Minister Celso Amorim, who heads the group known as the G20, said the handouts were "the most harmful single piece of commerce". (...)

Developing nations accuse rich countries of driving down the price of produce worldwide through subsidies and protecting their own markets. (...)

The United States, European Union and Japan have offered to reform their agricultural policies, but developing countries do not think they go far enough.

The 25-member EU - which gives the most generous breaks to its farmers - offered last year to phase out its subsidies but did not set a deadline.

On this topic, I agree entirely with the developing nations. Farm subsidies are more harmful to poor countries than any other outside force. Internal policies of the poorest countries can be even more harmful, but no other external force is.

The first priority of a developing country should be to build up agriculture. This is where most of its population is working, and it needs to be brought up above subsistence. If crop prices are held artificially low (the EU model), as crop subsidies in trading partners can do, that effort becomes much more difficult. Even where you have price supports that keep prices high (the US model), it still can hurt them, since then the government is likely to institute "food aid" that gives away the excess crops the government is forced to buy to support the prices. It is that or burn it up, and "humanitarians" cannot see burning food when people are hungry overseas. They fail to see that their "food aid" is a major cause of those people overseas being hungry.

When subsidies and price supports disappear, truly free trade in agriculture will feed the whole world in a much more equitable manner.


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