Poor countries can take advantage of farm subsidies given by rich countries

I had written about agricultural subsidies before:

Third-world countries always protest against huge agricultural subsidies given by rich nations like US, Europe etc. They charge that subsidies are causing prices of farm products to drop, causing farmers in poorer countries to loose their livelihood. Without a hint of irony they cite these subisidies as example of exploitation by rich countries! These countries then go about erecting trade barriers against agricultural imports in the name of protecting their farmers. Given the fact that people in the poor countries are dying of hunger and malnourishment these protests against "cheap" imports do not make any sense.

Since, farm subsidies make farm products cheaper, poorer countries should welcome them. Poor countries should remove all import barriers against subsidized farm products without waiting for WTO negotiations. Subsidized farm products will reduce poverty and malnourishment and thus they should thank rich countries for the subsidies as they represent net transfer of wealth from tax payers in rich country to the poorest people in poorer countries.
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Developing countries cannot use excuse of farm subsidies to erect import barriers. That will not be retialiation against rich countries but actually against consumers in developing countries.

Trent McBride at Catallarchy writes similarly on Agri-Subsidies.

…Commonly, in an exercise in overstating the case, free traders may argue that we should eliminate our farm subsidies to help poor farmers in developing nations. This would certainly help the poor farmers. But it ignores the fact that most inhabitants of the poorest nations are poor non-farmers who could use some cheap food. As it stands, our taxes that go to farm subsidies are very much simply redistributions to the world’s poorest. The charge that “dumping” cheap food into the nations is harmful is just as fallacious as when those certain parties state that “dumping” of cheap imports is not harmful to us (and free-traders rightly call this one out).

It’s pretty simple: subsidies for an exported commodity are helpful to the exporting producer and the importing consumer. They harm the exporting consumer and the importing producer. Free-traders seem to have fallen for the arguments of the politically connected farmers in the small countries, who happen to make the same arguments as the politically connected producers in this country who successfully impose tariffs…
…I have read around the ‘net some who oppose free trade claim that statements like mine above are some sort of qualification of free trade that underminds the case for it. This is not so. The simple fact is that the farm subsidizing policies in the US are not trade policies. This is important point. You can talk about these policies with regard to their international effects without commenting at all on trade policy. Subsidizing is simply a wealth transfer (in this instance, one from US taxpayers to US farmers and foreign consumers)….

Comments

[Sukrit Sabhlok]

Very astute points here. I agree, if import restrictions were significantly eased in Third World nations, the consumers in these nations would benefit. In addition, it would be a useful action to highlight the hypocrisy of some Western nations, particularly America.

Tariff levels are generally lower in the West anyway (in Australia they are practically negligible), but international pressure would heighten once it emerged that developing countries were taking positive steps toward trying to take charge of their own future rather than asking for aid handouts without economic reform.