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In this column in the International Edition of Newsweek, David Victor laments that high food prices have created an opportunity for governments to cut harmful farm subsidies--and governments are, for the most part, doing the opposite:
High food prices have been bad news for consumers, but they have revealed even worse news about the tendencies of government. Soaring crop prices offer a tremendous opportunity for smart reforms and real economic development. In rich countries like Western Europe's and the United States, high prices could, in theory, make it easier to wean farmers from lavish subsidies, plugging holes in the public budget and putting the world's farmers on a more level playing field. That, after all, has been the stated goal of free-market-oriented governments in the United States for many years. Lowering subsidies could also lighten farmers' footprints on the landscape; subsidized and protected farmers usually plow too much land and tread heavily with fertilizers and pesticides. Which makes it all the more surprising that the response of the United States in particular to the food crisis has been to do the opposite of what would be best for the world economy. Over the last month the U.S. Congress has passed new legislation that will heap even more cash on farmers. The bill will extend a program that protects U.S. sugar producers from world competition by guaranteeing that they alone can keep most of the U.S. market. It channels money to a wide range of farmers regardless of whether they need it, and it indexes new subsidies to already high crop prices, which puts the government on the hook for massive payments when prices eventually decline.
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Author
- David Victor
- Stanford Law School
- David.Victor@stanford.edu
- 650 724.1712