Tuesday, February 15, 2005
EU farm subsidies
Cool analysis of EU's farm subsidies by an influential Indian agricultural policy analyst, Devinder Sharma.
"..The Duke of Westminster, who owns about 55,000 hectares of farm estates, receives an average subsidy of 300,000 pound sterlings as direct payments, and in addition gets 350,000 pounds a year for the 1,200 dairy cows he owns. Under the CAP reforms, his subsidy entitlement will remain intact except that the subsidy he receives for the cows will now be shifted to the grasslands that he maintains.
Reminds me of the 25000 cotton farmers in the US driving millions in Africa to deprivation, destitution and death due to a similar protectionism by earning about $160,000 per yer per head in farm subsidies.
This is the real scandal of "free" trade today : the vast majority of Ricardian gains are pocketed by a small section of the Western populaiton at the expense of some of the most vulnerable people around the world. Developed nation have consistently used the WTO to push the developing world into reducing trade barriers, but heavily protected their domestic markets against competition. This mockery of "free" trade is nothing but thinly disguised mercantilism, and nowhere is the depredation more apparent than in agriculture where it has resulted in the loss of livelihood for millions of farmers in agrarian nations. However, the developing world seems to be finally waking up to the Western sham of paying lip service to free trade while pursuing mercantilism, and hopefully the G20 will take a lead in aggressively pushing for reforms towards a real free trade regime. As my b-school prof puts it, nobody has a right to deprive others of their comparative advantage. Stand up for Free Trade to End World Hunger : how's that for a modern version of Hasta La Victoria Siempre? :-) :-).
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