Agricultural Subsidies in Developing States

At any multilateral meeting, the issue of agricultural subsidies is addressed, and in those talks they are generally swept underneath a rug, only to maintain the status quo. The Doha talks as a part of the World Trade Organization for instance, which commenced in 2000, has dragged for more than 14 years as a result of how controversial the topic of agricultural subsidies is. The issue is coming to an agreement among developing nations and developed nations. With developed nation agricultural subsidies the barriers to entrance are too steep for developing nations, which prevents them from entering a market that in the long run would actually lower world crop prices. The developed nations refuse to remove their agricultural subsidies or have simply coined a system of “crop insurance,” which is essentially an indirect subsidy. They choose to maintain these subsidies to appease their constituency, and due the fear of the short term unemployment and decline that may occur, before the economy allocates itself more efficiently usually by nature. The question then becomes, what is the best way to wean the world off agricultural subsidies, keeping these factors in mind?

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