Farm Subsidies on the Rise in the Developed World

While developing nations are beginning to see the light and at least attempt
to restructure their agricultural controls, farm subsidies are increasing in
the richest nations in the world.

According to the Organization from Economic Cooperation and Development, farm
subsidies in wealthy nations jumped from 32 percent of total gross farm receipts
in 1997 to 38 percent of total gross farm receipts in 1998. Such subsidies cost
wealthy nations an estimated $362 billion annually — 1.4 percent of the gross
domestic product.

As the OECD report on subsidies summed up the situation, “The trend over the
last decade has been toward lower support, fewer trade distortions and more
market orientation, but developments in 1998 suggest that agricultural policy
reform and trade liberalization risk being stalled or reversed when market pressures

In other words, as market reform has led to lower food prices, the tendency
to increase price supports for the endangered family / corporate farmer intensifies.
Rather than get it in their heads that low food prices are a good thing, politicians
decry and bemoan the very success of agricultural markets.

Lets hope this is a temporary phenomenon as effectively operating agricultural
markets will play an indispensable role in feeding the two to three billion
additional human begins that will be added to the world’s population by the
middle of the 21st century.


Farm subsidies in wealthy nations on the rise in 1998. Greg Frost, Reuters
News Service, May 21, 1999.

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