Tuesday, March 11, 2014

Farm subsidies nearly $500 billion per year

Governments provide about $500 billion worth in farm subsidies every year, according to research by the Worldwatch Institute.

In 2012, the most recent year with data, agricultural subsidies totaled an estimated $486 billion in the top 21 food-producing countries in the world, the institute says in a recent news release.

These countries -  Canada and other members of the Organization for Economic Co-operation and Development (OECD) plus Brazil, China, Indonesia, Kazakhstan, Russia, South Africa, and Ukraine - are responsible for almost 80 percent of global agricultural value added in the world, writes Grant Potter in the Worldwatch Institute's latest Vital Signs Online trend.

Agricultural subsidies are not equally distributed around the globe. Asia spends more than the rest of the world combined. China pays farmers $165 billion.

Japan spends $65 billion, Indonesia $28 billion, and South Korea $20 billion. 

Canada spends $7 billion, a figure that includes the benefit of higher prices that supply management returns to dairy and poultry farmers.

Europe’s Common Agricultural Policy (CAP) delivers farmers more than $50 billion worth of benefits and costs 44 per cent of the European Common Market budget for 2011.

If European price supports are included, the benefits rise to more than $106 billion per year.

The United States spent more than $30 billion; the new farm bill scraps $5 billion in direct payments, but adds $9 billion to crop insurance.

Mexico spends about $7.5 billion.

Of the countries studied by the OECD, 94 percent of subsidies were spent by Asia, Europe, and North America-leaving only six percent for the rest of the world.

The main goal of world trade negotiations that began 11 years ago was to narrow the gap between the rich and poor countries.  The negotiations are stalemated.

Economists say that sharply reducing these disparities in farm subsidies and trade barriers would be worth about 10 times as much as all of the international aid programs for poor countries.