Farm Support’s Deep Roots

As US sugar growers lobby against the Central American Free Trade Agreement (CAFTA), EU budget talks are stalled, in part because of resistance to a proposed decrease in farm subsidies. Because of the political power of farmers in Europe and the US, however, world trade liberalization could continue to be held back by lingering agricultural subsidies. A new report reveals that little progress has been made on reducing agricultural support levels over the last two decades. While there remain large discrepancies in producer support among OECD countries, many governments have decreased the distorting kinds of protections – most notably, subsidies based on production levels. Still, agricultural supports in rich nations continue to depress the global prices of farm products, and few third-world farmers can compete with the heavily subsidized produce from developed countries. – YaleGlobal