Why fear subsidies’

Agricultural subsidies and the refusal of the US and EU to phase them out are preventing poorer countries from developing and damaging multilateral trade says Joseph Stiglitz in Taipei times.

KICK-ASS, a website started by the Guardian aimed at kicking into oblivion all agricultural subsidies, states that ‘over 60% of US farmers don’t get any subsidies at all and manage to survive. New Zealand abandoned subsidies unilaterally some years ago and its farming industry has thrived.’

The main concerns are
1) With elections looming in November, US President George W. Bush could not “sacrifice” the 25,000 wealthy cotton farmers or the 10,000 prosperous rice farmers and their campaign contributions.
2) With 70 percent or so of people in developing countries depending directly or indirectly on agriculture, they are the losers under the current regime.
3) If markets are opened up, countries should be given the right to countervail US and European subsidies.

In India, more than 60% of the populace depend on agriculture for their livelihood. The subsidies that the developed nations offer their farmers vis-‘-vis to what the developing countries can offer is very large. The developing nations find it difficult to withstand this competition in the world markets. If the subsidies are not reduced by the US and the EU, it will be the developing nations who will have to bear the brunt.