firehand

Prometheus 6   

Do not make the mistake of thinking that because my conclusion is the same as another person's that my reasoning is the same

August 20, 2003

 

More fun with conservatives

Jacob Levy has a TNR article about agricultural protectionism.

…Agricultural protectionism--the combination of quotas, tariffs, and subsidies for farm products--may be the purest example of destructive special-interest politics ever created. Rich countries--with a few exceptions, such as Australia--burden their own populations three times over. The policies cost taxpayers directly--the atrocious 2002 U.S. farm bill is slated to cost $180 billion over ten years. (Worse, annual unbudgeted "emergency" farm spending during the late 1990s accounted for a great deal of the spending boom that squandered much of the predicted budget surplus long before the first Bush tax cut took effect.) In return for their largesse, taxpayers get the privilege of paying higher prices as consumers (and, of course, inflated prices for basic foodstuffs hit the poorest proportionately hardest). And, by locking up an excess of labor and capital in an agribusiness sector that couldn't turn an honest profit on its own, agricultural protectionism inhibits productivity growth, preventing shifts in employment and investment to more productive parts of the economy.

Still, the costs agricultural policies impose on their own societies are manageable in the huge economies of the developed world. The costs they impose on the rest of the world are often devastating. By shutting off access to developed countries' markets for the goods that developing countries are most likely to produce competitively, agricultural protectionism forecloses the most likely route to development and poverty alleviation. Moreover, the artificially high prices in the rich countries encourage overproduction there; the surplus gets exported at cut-rate prices, which not only makes it hard for developing countries to compete in export markets, it typically makes poor farmers uncompetitive in their home markets as well. And as farms go out of business, unemployed and underemployed farmers migrate to sprawling cities; but often there aren't many jobs available in the cities, either. (The next rung up the development ladder after agriculture is typically textiles, which is also the subject of massive protectionism.) In the end, the damage done to poor countries by the agricultural policies of the United States, the European Union, and Japan probably far outweighs the aid they gives those countries. Liberalizers have recently begun deploying this calucllation: In a world where more than a billion people, mostly the rural poor in the developing world, live on less than one dollar per day, every cow in the European Union receives an average daily subsidy of more than twice that.


I like.

posted by Prometheus 6 at 8/20/2003 08:20:47 PM |

Posted by P6 at August 20, 2003 08:20 PM | Trackback URL: http://www.prometheus6.org/mt/mt-tb.cgi/162
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