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  • Farm Subsidies Hurt the Poor Worldwide

    Dairy farmers spray milk at a European Parliament building. (Photo: Xinhua/Newscom)

    Got milk? The European Parliament sure does. European dairy farmers were in Brussels this week to protest proposed changes in dairy regulations.

    Protestors doused the parliament building with milk and capped off a rough 10 days for the European Union (EU) capital following a failed summit last week over the EU’s next budget.

    At the heart of both of these issues is the EU’s massive and wasteful Common Agricultural Policy (CAP), which in the span of a week seems to have enraged both British Prime Minister David Cameron and bovines in Bordeaux.

    What is lost in all of this is just how selfish and wasteful these agricultural policies are. Subsidies and price controls are protectionist measures that insulate European farmers from the world market, raising prices on foodstuffs and distorting the market for goods.

    In particular, they hurt the world’s most vulnerable. Millions of people in developing nations—which are normally agriculturally endowed—are blocked from the European market and prevented from profiting off of European consumers. This stifles development in third-world countries and keeps millions in poverty.

    Not only does CAP hurt the poorest in developing nations, but it is a millstone around the neck of an already austere Europe. CAP is hugely expensive, making up 47.6 percent of the entire EU budget—which leaders proposed be set at $1.31 trillion for the 2014–2020 period. Eurocrats in Brussels are infamous for wasting funds, but in reality the finger should be pointed at European farmers.

    If the international community is ever going to attack global poverty, it should start by reforming farm subsidies like CAP and the U.S. farm bill. The developed world’s fondness for wasteful agriculture policies sends the wrong message about free trade. European leaders should not pass up this opportunity to reduce the EU budget and tighten these wasteful subsidies.

    Posted in Economics [slideshow_deploy]

    2 Responses to Farm Subsidies Hurt the Poor Worldwide

    1. Adele says:

      The removal of these subsidies will be a clear demonstration of the ability of the multilateral trading system to respond positively to the genuine cry of the many poor African farmers who live on less than one dollar a day,

    2. Rick Williams says:

      Ryan,
      You left out a few key details in regard to the US programs.

      US government policy has often hurt farmers by allowing minimally or non-tariffed food items to be imported into this country from countries with subsidized farms and/or from countries with cheap labor (almost slave labor in China) while at the same time burying US farmers under tons of regulations and restrictions. An example would be countries still using certain pesticides that are illegal here, our consumers are placed at risk, our farmers can not compete and the security of our nations self grown food supply is placed at risk. Imagine a major conflict involving Russia, China, Iran, North Korea and the effect such a war would have on import-export world markets and THEN the lack of enough food for our own citizens due to the number of farms that had shut down.
      In a truly capital based economy the playing field would be leveled by eliminating subsidies which is paid for by the taxpayers and only using tariffs to offset differences in labor costs, rules and regulations.

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