NCPA - National Center for Policy Analysis

Eliminate Farm Subsidies?

August 25, 2003

When the 146 nations of the World Trade Organization (WTO) meet next month in Cancun, Mexico, they can hasten the pace of eliminating rampant inequities in the global economy, especially in agricultural trade.

For starters, says the Los Angeles Times, they should tell Washington, Tokyo and the Europeans to wean their farmers from costly, wasteful subsidies. This would give a desperately needed boost to the developing world.

Domestic subsidies, tariffs and other unfair impediments to free trade must fall, says the Times, but it's unrealistic to think domestic handouts that mighty agricultural lobbies have wrung out of First World governments will disappear. These subsidies are staggering:

  • About $180 billion in the next decade in the United States, a big chunk of it for sugar.
  • Around $60 billion annually in the European Union, for products like beef, dairy and grains.
  • Some $31 billion a year in Japan, for rice and other products.

What might be shrunk, though, are unfair agricultural export subsidies: up to $5 billion annually for the Europeans and a modest $15 million for the United States. Robert Zoellick, the U.S. trade representative, has said he would be happy to eliminate these subsidies tomorrow if we could get the Europeans to eliminate theirs.

Enough with talk, says the Times, it's time to make even small progress, eliminating some farm subsidies and bolster global free trade.

Source: Editorial, "Hurtful Farm Subsidies," Los Angeles Times, August 25, 2003.


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