Saturday, May 17, 2008

Agriculture Subsidies that work (better)

Given the massive amounts of profits farmers are reaping as a result, the US government of course can't stop itself from passing another series of massive subsidies for farmers (Flash Report). Some have even made the remarkable statements that subsidies force down food prices and therefore help the poor (

The reality is that farm subsidies have been keeping farmers in the third world poor. Because developing countries seem to often be in tropical climates, farming offers an opportunity out of poverty. Dumping food "aid" into these countries destroys local capacity for growing food (why would anyone want to grow crops if those same crops get distributed free?). There are those however who would push for a more sensible policy - buy food and feed people from local markets directly subsidizing those who need it. Titled "Africa does not have to starve", Norman Borlaug (Nobel Peace Prize winner for kicking off the Green Revolution) makes the argument in the WSJ (h/t Thomas Barnett).

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