Kicking the subsidies

“Giving subsidies to farmers was a brilliant idea that transformed the food shortages after the second world war into a surplus. But it has grown into an institutionalised nightmare preventing developing countries from fulfilling their potential in one of the few areas where they enjoy a natural advantage – agriculture. Europe and the US are the main culprits. It is economic and social madness for Europe to be growing, for instance, subsidised sugar beet when its average cost of production is more than double that of efficient exporters such as Brazil and Zambia. It is only possible thanks to ludicrous subsidies, including protective tariffs of up to 140%…

There is only one way to deal with this. Make it simple and effective. Abolish all agricultural subsidies so that every proposed reform doesn’t generate new escape routes that negate its primary purpose. To this end, the Guardian is starting a new website today, aimed at kicking into oblivion all agricultural subsidies (http://kickaas.typepad.com). This is one of those rare topics that unites right and left. It is also one of the few remaining free lunches in economics from which practically everyone gains. It would galvanise developing countries’ agriculture while freeing more than $300bn currently being spent by governments – over $200 per capita – every year on subsidies for other purposes. There will inevitably be transitional problems for some western farmers but nothing like the structural change other industries have experienced. And in the long run it will be of benefit to them, too. They will be able to grow crops they are good at rather than those attracting subsidies. All that the developing countries are seeking is a level playing field on which to compete. Is that too much to ask?” Guardian/UK