Friday, June 02, 2006

Doha and Agriculture Subsidies

One of the few positive things that can be said about American agricultural policy is that it’s not as bad as Europe’s. So, not only does this toxic mess run up the prices of food around the world, create environmental problems, and generally harm poorer countries who could be exporting food, it now threatens the Doha round on tariff reductions.

Even Barney Frank recognizes the fundamental goofiness of our farm policy. Here’s a nice old WSJ summary on the sugar issue, which as been around for years, and seems especially resistant to change.

And here’s an article that hints at the problem – having created a subsidized class of producers (domestic sugar growers), these producers then agitate for an expansion of the subsidy, as well as guaranteed markets. In this case, jumping on the fact that mismanagement of energy policy provides an opening to have the government expand guarantees profitable markets by mandating the use of ethanol.

As a bonus argument, the sugar lords now get to argue that the tariffs are more needed than ever to secure “domestic energy production”.