Agricultural subsidy
According to UNDP head, Achim Steiner, redirecting subsidies would boost the livelihoods of 500 million smallholder farmers worldwide by creating a more level playing field with large-scale agricultural enterprises.
[2] A separate report, by the World Resources Institute in August 2021, said without reform, farm subsidies "will render vast expanses of healthy land useless".
[3] On the earliest known interventions in farming markets was the English Corn Laws, which regulated the import and export of grain in Great Britain and Ireland for centuries.
[4] Agricultural subsidies in the twentieth century were originally designed to stabilize markets, help low-income farmers, and aid rural development.
[5][unreliable source] In the United States, President Franklin D. Roosevelt signed the Agricultural Adjustment Act, as part of the New Deal in 1933.
[11] The Canadian Agricultural Partnership began in April 2018 and is planned to take place over five years with a combined federal, provincial and territorial investment of three billion dollars.
The subsidy was implemented by means of a coupon system which could be redeemed by the recipients for fertilizer types at approximately one-third of the normal cash price.
[16] According to policy conclusions of the Overseas Development Institute the voucher for coupon system can be an effective way of rationing and targeting subsidy access to maximize production and economic and social gains.
Many practical and political challenges remain in the program design and implementation required to increase efficiency, control costs, and limit patronage and fraud.
[16] New Zealand is reputed to have the most open agricultural markets in the world[17][18][19] after radical reforms started in 1984 by the Fourth Labour Government stopped all subsidies.
In 1984 New Zealand's Labor government took the dramatic step of ending all farm subsidies, which then consisted of 30 separate production payments and export incentives.
And New Zealand farming was marred by the same problems caused by U.S. subsidies, including overproduction, environmental degradation and inflated land prices.As the country is a large agricultural exporter, continued subsidies by other countries are a long-standing bone of contention,[20][21] with New Zealand being a founding member of the 20-member Cairns Group fighting to improve market access for exported agricultural goods.
[23] According to environmental group Doğa the subsidies for water intensive crops such as corn and sugar beet endanger wetlands in Turkey.
[26] Despite subsidies farmers' fuel and fertilizer costs increased a lot in 21/22 due to international price rises and the fall in the lira.
Signed after the September 11th attacks of 2001, the act directs approximately $16.5 billion of government funding toward agricultural subsidies each year.
For example, a large part of the support to program crops has not been linked directly to current output since the Federal Agriculture Improvement and Reform Act of 1996 (P.L.
In 2006, talks at the Doha round of WTO trade negotiations stalled because the US refused to cut subsidies to a level where other countries' non-subsidized exports would have been competitive.
[66] Moreover, the same study found that the least developed countries have a higher proportion of GDP dependent upon agriculture, at around 36.7%, thus may be even more vulnerable to the effects of subsidies.
The Food and Agriculture Organization describes this liberalization process as being the removal of barriers to trade and a simplification of tariffs, which lowers costs to consumers and promotes efficiency among producers.
[72] Opening up Haiti's economy granted consumers access to food at a lower cost; allowing foreign producers to compete for the Haitian market drove down the price of rice.
[75][76] The United States Department of Agriculture notes that since 1980, rice production in Haiti has been largely unchanged, while consumption on the other hand, is roughly eight times what it was in that same year.
[78] As rice farmers struggled to compete, many migrated from rural to urban areas in search of alternative economic opportunities.
For example, in France, the single largest beneficiary was the chicken processor Groupe Doux, at €62.8m, and was followed by about a dozen sugar manufacturers which together reaped more than €103m.
[91] From a public economics perspective, subsidies of any kind work to create a socially and politically acceptable equilibrium that is not necessarily Pareto efficient.
[92] A study by the UN Food and Agriculture Organization found 87% of the $540bn farmers given every year between 2013 and 2018 in global subsidies are harmful to both people and environment.
[2] The monoculture system associated with subsidized large-scale production has been implicated as a contributory factor in Colony Collapse Disorder which has affected bee populations.
[95] Liberals argue that subsidies distort incentives for the global trade of agricultural commodities in which other countries may have a comparative advantage.
Allowing countries to specialize in commodities in which they have a comparative advantage in and then freely trade across borders would therefore increase global welfare and reduce food prices.
[96] Ending direct payments to farmers and deregulating the farm industry would eliminate inefficiencies and deadweight loss created by government intervention.
Via Campesina, take action by arguing that only by changing the export-led, free-trade based, industrial agriculture model of large farms can halt what they call the downward spiral of poverty, low wages, rural-urban migration, hunger and environmental degradation.
