Agriculture Subsidies And Development 6qq1h

07/03/2012

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e S b idie And De elopmen

AGRICULTURE SUBSIDIES AND DEVELOPMENT QUESTION 1 IF AGRICULTURAL TARIFFS AND SUBSIDIES TO PRODUCERS WERE REMOVED OVERNIGHT, WHAT WOULD THE IMPACT BE IN THE AVERAGE CONSUMER IN DEVELOPED NATIONS SUCH AS THE UNITED STATES AND THE EU COUNTRIES? WHAT WOULD BE THE IMPACT ON THE AVERAGE FARMER? Lowering the tariffs and getting rid of subsidies would allow the average consumers to save. The prices for these products would be cheaper and the taxes paid would eliminate because there would no longer be any subsidies to pay for. On the other had this would be a negative for the average farmers in these nations. There would no longer be a surplus of goods that could be sold to monopolize the market. Farmers would no longer benefit from the subsidies they received all profits would be based on production. Lower commodity prices in developing nations would cause farmers to lose revenue because in order to make a profit they would have to raise prices causing them to not be competitive within their market. QUESTION 2 WHICH DO YOU THINK WOULD HELP THE CITIZENS OF THE WORLD S POOREST NATIONS MORE, INCREASING FOREIGN AID OR REMOVING ALL AGRICULTURAL TARIFFS AND SUBSIDES? Foreign aid comes with strings attached and it does not come without a cost. Foreign aid only seems to balance out the “goodwill” of developed countries. As stated in the case the foreign aid that these developing nations receive from developed countries is less than what they are losing if allowed to sell the commodities that the posses in their countries. Clearly these developing countries would benefit from removing all agricultural tariffs and subsides. QUESTION 3 WHY DO YOU THINK GOVERNMENTS IN DEVELOPED NATIONS CONTINUE TO LAVISH EXTENSIVE ON AGRICULTURAL PRODUCERS, EVEN THOUGH THOSE PRODUCERS CONSTITUTE A VERY SMALL SEGMENT OF THE POPULATION? The political well being of politicians during election time is at stake if this very small segment of the population is protected. The set up of these subsidies assure this population of their employment and is all beneficial to the developed country because that is less they have to import. The agriculture in these developed nations allows those in the market to hedge against those they are in competition with. QUESTION 4 THE CURRENT DOHA ROUND OF TRADE TALKS ORGANIZED BY THE WORLD TRADE ORGANIZATION IS TRYING TO REDUCE BARRIERS TO FREE TRADE IN AGRICULTURE. SO FAR, HOWEVER, THE TALKS HAVE MADE LITTLE CONCRETE PROGRESS ON THIS ISSUE AND AS OF MID 2007 THEY ARE STALLED. WHY DO YOU THINK THIS IS THE CASE? WHAT OTHER SOLUTIONS MIGHT THERE BE TO THE PROBLEMS CREATED BY BARRIER TO TRADE IN AGRICULTURE? These talks of free trade in agriculture have had little to no progress because they cannot come up with an agreement that will satisfy developed countries. Currently these subsidies are protecting these developed nations such as the EU and the US farmers and are highly protecting their assets, which in this case is their agriculture. The millions of dollars given out by the government by these subsidies is a huge contributor in the economy and generate a lot of profit for developed nations. This trade barrier would force developed nation to compete head to head with developed nations ultimately eliminating the use of selling on the world market. RECOMMENDATION. . e mpape

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07/03/2012

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e S b idie And De elopmen

Developed nations must significantly shrink or eliminate giving substantial subsidies to corporate famers in their respective nations. Foreign aid to developing nations should not be restricted by donor interests and agendas. Grant equal market access and create engines for growth in developing countries. Increase world prices and shift production from high-cost, protected producers in the developing world. Make technology available to developing nations to improve production. Invest in post-agricultural instruments to enable storage over a stretched period.

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