Subsídos agricolas

While progress on reducing support levels may be painfully slow, most governments have managed to reduce the more distorting kinds of protections. Instead of subsidies tied to production levels, which were responsible for the infamous mountains of butter and lakes of wine that used to plague European agriculture officials, countries are slowly moving towards compensation based on acreage or historical support levels. In 1986-88, the majority of OECD countries had 90% or more of their support programmes linked to either current outputs or inputs; that number has now fallen below 75% in most of Europe, though it remains above 90% in Japan and South Korea.

But agricultural policies in rich countries still distort markets at home and abroad. Worse, they hurt the poor. Price-support mechanisms make domestic consumers pay more for their food, hitting low-income families the hardest. And for farmers in poor countries, OECD agricultural policies are disastrous. If those farmers aren’t being kept out of export markets by quotas or tariffs, they are being undercut in domestic markets by heavily subsidised produce from the developed world. While some have argued that rich-world subsidies are a net boon to poor countries because they provide cheap food to the masses, in those countries the poorest are often rural farmers, whose lives would be improved by higher prices for their products.

Even where distortions have been reduced, legislators have passed up the opportunity to tailor supports to specific beneficiaries or policy goals, such as environmental protection. Instead, new programmes have mostly been drawn along broad lines, the better to maintain the political support of farmers. Payments for acres of land or head of cattle may be better than compensation based on bushels of wheat or gallons of milk, but they still distort the economy, and give farmers incentive to cultivate marginal land.