Posted: 03/24/2006
Farm Subsidies Devastate the World's Poor and the Environment
NCPA E-Team research shows free market is the best solution
DALLAS (March 24, 2006) - Farm subsidies bankrupt both the environment and already struggling countries from the developing world. That's the conclusion of a new report released by the National Center for Policy Analysis (NCPA). The report can be accessed online at - http://www.ncpa.org/pub/ba/ba547/ba547.pdf.
"Subsidized agriculture in the developed world is one of the greatest obstacles to economic growth in the developing world," said NCPA Senior Fellow H. Sterling Burnett, who co-authored the report. "American cotton subsidies cost sub-Saharan Africa $302 million in 2001 and 2002 alone."
According to the NCPA report, subsidies encourage overproduction. Surplus crops are then sold below the cost of production, depressing world prices. As a result, countries with unsubsidized goods are essentially shut out of world markets, devastating their local economies.
"Right now, developed countries like the United States contribute over $50 billion annually in foreign aid to underdeveloped countries," said Max Borders, NCPA adjunct scholar and the report's other co-author. "If developed nations reduced their subsidies and eliminated trade barriers, this aid would be unnecessary, and rural poverty would be reduced."
The authors also note that the World Trade Organization recently reported that the overproduction of agricultural products due to subsidies causes significant harm to the environment. Exposure to pesticides and fertilizers, destruction of wildlife habitats, and land degradation all stems from the intensification of agricultural production due to government subsidies.
Burnett concluded, "Eliminating these subsidies would allow the Bush administration to accomplish three major things: earn environmental credibility, trim fat from the budget, and help developing countries in a long-lasting and meaningful way."