Talk:Agricultural subsidy

Are European and US subsidies rising or falling?

I have a theory that the rising food prices are due to a decline in food subsidies.

-G

Are there ANY benefits to subsidizing?

The price has fallen for the product, but taxes would have risen to subsidise the producers. So, it would be the same as paying the higher price for the product… if not more considering its incredibly inefficient.

-G <huge>—Preceding unsigned comment added by 134.117.158.83 (talk) 01:58, 29 October 2007 (UTC)</huge >

On a semi-related side note, why is it that prices decrease, if that is in fact what happens? The very definition of Price Support is keeping prices artificially high. 68.181.240.185 (talk) 07:36, 9 April 2008 (UTC)

Yeah, I was wondering about that myself. I do think agricultural subsidies higher food prices. If anything, it raises them. 71.202.109.55 (talk) 21:08, 7 July 2009 (UTC)

I don't know the actual reasons agricultural subsidies are in place, but I can think of possible reasons to have them. Regarding higher taxes offsetting the reduced price via subsidies, that only makes sense if you look at the whole population aggregated as one. But if subsidies did cause higher prices, people would benefit almost by a similar dollar amount (everyone eats about the same amount of food in a day), while taxes tend to be levied by percentages or correlated to total income. So the end result of such a subsidy would be lower food costs (mostly felt by poorer folk) paid for by higher income people.

I could see a subsidy that might attempt to generate extra supply of food for national security reasons in case of disaster that causes shortage, local or worldwide. It could also be to keep supplies local to avoid being dependent on foreign countries for food, because if that were the case, foreign governments controlling the food supply could have stronger negotiating power over us (blackmail even), or might require us to guarantee their security (as is the case with depending on foreign oil).

There may be subsidies that provide compensation for a benefit that is hidden from farmers. For example, ethanol may have the benefit of being cleaner than oil, reducing dependency on oil, and reducing trade imbalances from oil imports, but farmers and users of ethanol don't directly see these costs and benefits (they are external costs/benefits). These costs/benefits are spread out among everyone including those not even involved with ethanol in any way (cleaner air, cheaper oil/gas, less climate change, stronger currency, national security). A subsidy could possibly be a way to internalize these costs/benefits for the ethanol economy.

But I've heard of subsidies that pay farmers not to grow. Naturally, I would think this is intended to keep prices higher (without the rigidity of price controls). This might be a way to keep the small-farm way of life alive as a culturally important way of life, or perhaps to prevent a mega-agriculture oligarchy from taking over food. Or it may just be welfare for small farmers who have been farmers for generations. From what I've gathered, small farmers are often barely getting by. But maybe their lands cost a lot in property taxes, so this could be to help offset that. But then again, I've heard mega-farms are the major recipients of subsides. In which case, subsidies may just be due to strong lobbying... Timofmars (talk) 07:21, 14 July 2009 (UTC)

NPOV

Why is this so hard to make NPOV. Leave the politics, benefits and criticisms out and just say what agricultural subsidies are.

I came to this article originally to see why the US has the agricultural subsidies that they do. I wasn't looking for a definition. I would looking for the sides of the debate, or to see if it was nothing more than institutionalized political pork barreling. The politics, benefits, and criticisms are important can be done NPOV. The most apparent problem in the article right now is the "Benefits" section which seems to set up the benefits as strawman arguments and then knocks them down all within that same section. If I feel like it, I'll edit this article a bit. Timofmars 06:45, 21 October 2007 (UTC)

Perhaps that's because the "benefits" of government-imposed market distortions are so minimal in the first place? 71.202.109.55 (talk) 21:13, 7 July 2009 (UTC)

Seeing as they have everything to do with politics I don't think that would make a very informative article. 168.103.62.53 (talk) 00:17, 2 January 2011 (UTC)

General

This needs help. It's a very controversial area where NPOV is going to be difficult. Bharshaw 19:56, 30 June 2006 (UTC)newbie

I notice that there is next to nothing on the arguments in favor of ag subsidies. JLW777 01:41, 12 August 2006 (UTC)

Anyone expanding or revising this page should consider improving the history of farm subsidies. It is a complex and long history.

I've noticed that there's a stub at subsidy farming, as well. Should we just redirect that to this page? If nobody objects I'm going to go ahead and do so tomorrow. Resonanteye 05:25, 19 November 2006 (UTC)

At the risk of adding to the percieved negative tone of this article, I think it is important to discuss the political forces at work that encourage agrecultural subsidies. The dwindling number of people living on farms is noted, but not the effect that comes of it as a large block of rural ridings are controlled by a disproportunately small number of voters who are closely tied to farming industries and therefore biased toward subsidization. Increesing agrecultural subsidies buys votes. Phillip Beynon

NPOV

I added an NPOV tag so that hopefully, we can get this article to be more neutral. There are several benefits to ag subsidies that aren't even discussed. It's heavily biased against them. --buckeyes1186 05:12, 12 October 2006 (UTC)

Added a benfits section, hopefully that helps. I don't know how you all feel about removing the NPOV tag. Warhol13 20:43, 5 December 2006 (UTC)

I added three benefits and I think the article as it is now does a good job o explaining the two sides. I'm going to remove the NPOV tag in a few days if there are no objections. Warhol13 04:15, 27 December 2006 (UTC)

Historical Data

Is there a chart somewhere of subsidies in the US and europe and how they are growing/diminishing? It wqould be enlightening to find two areas with oposing policy which could be contrasted and have few other signifigant factors. (Unsigned - October 23, 2006)

Negative article

This article is VERY non-neutral. Someone with some background in economics really needs to expand on the benefits of subsidizing agriculture. Currently there is just a basic amount of statistics on it followed by a large block of criticisms. (Unsigned - November 15, 2006)

The reason there is so little mention of benefits is that they are few and far between. Farm subsidies are good for farmers and bad for everyone else, and economic theory shows that the bad should greatly outweigh the good.

The whole page is riddled with errors and inconsistencies starting from the first phrase and continuing to the para immediately above. Subsidies can be from other sources than just government spending. Farm subsidies are not necessarily good for farmers nor bad for everyone else. Farmers may not even benefit from some subsidies (for example where subsidy is capitalised into land values, benefiting land owners (as opposed to farmers - roughly half of farmers own the land they farm in both the U.S. and the EU).

This article completely fails to mention the primary method of agricultural subsidy. That is, price support by means of the federal government purchasing commodities in the market in order to increase demand and push up the price. Not only is this far, far more expensive than simply making payments to farmers, it prevents developing economies from advancing by effectively blocking the import of agricultural goods. My wording on this is not great, so I haven't updated this article yet.

Of course, the article should be NPOV. However, the economic costs and benefits of farm subsidies are widely known and mostly agreed upon by economists. If the objective of this article is to discuss facts, the "Criticisms" section should be much more detailed and likely more "negative" than it is.Edwardmking 20:49, 26 February 2007 (UTC)

What are those benefits of farm subsidies? Because I don't know very strong arguments for subsidies, this article doesn't seem non-neutral. Are subsidies just political catering? A lot of the reasoning behind benefits seems strained. I can see an argument for subsidies being used to keep a country self-sufficient in order to not be blackmailed or bullied in negotiations because of dependence on foreign agriculture (similar to arguments about dependence on foreign oil). I can also see an argument for subsidies in order to over-produce a bit in case of a disaster, drought, or worldwide food crisis. I thought also that farmers can be paid to "not grow" crops as well. I can see that being necessary to keep some diversity because couldn't the most efficient large profitable farms just produce as much as possible, quickly driving other farms out of business? Perhaps keeping some diversity by limiting competition and production is good for security of food supplies? And even if these are the reasons there are subsidies, is it going farther than is necessary? The other arguments don't seem to have much steam. Timofmars 19:30, 27 July 2007 (UTC)

Ambiguity in Benefits

Someone put "Farm subsidies have the effect increasing production and therefore lowering the price of food" probably in response to "Someone with some background in economics really needs to expand on the benefits of subsidizing agriculture". This really is desperately clutching at straws! The price of food PER UNIT BOUGHT likely does, but to deduce further (i.e. state that the savings per unit are greater than the cost of extra needless produce) is, at the very least, not encyclopedic! This then makes the rest of paragraph (though factual and interesting) redundant in this section. Therefore, I propose removing it all. 09:55 GMT - Chris 31 January 2007

The section must somewhere say that subsidization lowers the price of food as this is the most obvious benefit for consumers. I understand you rationale, but the article never said that the savings were greater than the extra costs. It simply stated a benefit of subsidization. If you would like to add an addendum note to the section so that there is no longer an implication, then by all means do. Warhol13 13:55, 18 February 2007 (UTC)

I feel it is very dubious to include this "benefit". Since you have reinstated the paragraph I have added

Economists strongly rebute the benefits of reduced retail prices derived from subsidising over-production. If the government were to subsidise car manufacturers to produce more cars then this would indeed lower the showroom price but it would be the consumer's own money collected through tax that would be used to fund the over-production. It would be impossible for the lower retail costs to outweigh the addition production costs otherwise the manufacturers could simply implement this technique themselves.

The benefits section is largely inacurate. The economic benefits of farm subsidies are virtually non existent (except to farmers). The only sound economic argument is that subsidies help smooth anual fluctuations. But this could more efficiently be achieved through insurance mechanisms. The only plausible arguments in favour of farm subsidies, is that without the subsidies, farmers could not compete with foreign farmers, and would thus go out of business. This is seen as undesirable by some people on social, cultural, or national security grounds. But it is not an economic argument.

In particular though, the following phrases are completely wrong, and make very little sense: "In other markets, this would cause producers to cut back until a new equilibrium was reached. However, in agriculture, this does not happen as land will always be farmed and therefore is fixed. Demand is also inelastic in the case of food. That is, people will not eat more if food is cheap."

Land will not always be farmed. Land can be used for many things besides farming. And even if farm land remains as farm land, the intensity of production (the volume of crops produced on that land) can easily be scaled back. Also, while the demand for "food" is quite inelastic, it is not true to say that people won't eat more if food gets cheaper. Of course people will eat more if food is cheaper! Inelasticity simply means that increased consumption will be less than proportional to decreased prices. More over, inelasticity of demand for food does not provide any basis to argue in favour of farm subsidies.

Northern Bear 15:55, 26 April 2007 (UTC)

Re-write

This entire article needs to be re-written. There is little neutral point of view. Under benefits, it states that subsidies are unnecessary because they ensure a livable wage for farmers. This is obviously not neutral and "livable wage" is an ambiguous phrase. It also states that demand for food is inelastic which is ambiguous, as elasticity changes depending on short and long run. There is a solid argument that the obesity problem is the result of much cheaper food (i.e. people are eating more because food is cheaper). The article also states that farms are "too" efficient and produce more food than can be eaten. However, the main for of agricultural subsidy (and the most damaging) are price supports. The whole point of a price support is that it encourages production by guaranteeing an artificially high price. If the price were allowed to fall to its market equilibrium, less farmers would find it profitable enough to farm and so production would likely fall. The article states simultaneously that there is over-production and that production needs to be encouraged. Please see the article on price support for a better idea on the effects of these subsidies.Edwardmking 20:44, 27 February 2007 (UTC)

Agreed, a good way to start would be separating "Benefits" and "Criticisms". This is a poor way to structure the article (and contrary to Wikipedia NPOV policy). Many statements on one side are followed by a rebuttal statement (which in keeping with the current structure, should be located in the other section), while other topics are divided across sections. The result is that it is harder to understand each issue, and neither section ends up treating the topics with neutrality. It would be better to have sections for specific topics, such as "Effect on developing countries" and "Effect on small farms" (or perhaps "Distribution based on farm size"). This would be much more productive than earlier efforts to "balance" the sections against each other. AAMiller 21:34, 11 August 2007 (UTC)

I removed the criticisms from the benefits section since they should belong in the "Criticisms" section. If you don't like it, please fix it. That section was disaster. 129.170.125.93 (talk) 15:54, 25 July 2008 (UTC)

Reorganized by topic. -- Beland (talk) 07:11, 5 October 2009 (UTC)

Edit of the crop subsidies chart.

I edited the chart to put all the rows in order from most subsidized crop to the least subsidized crop. I think this makes more sense, because before there was no order to the rows at all. —Preceding unsigned comment added by 205.236.144.4 (talk) 16:30, 7 September 2007 (UTC)

Chart expansion

I was thinking it might be more informative if there were a column for $/acre added. Just a thought. Brian Pearson (talk) 16:23, 30 March 2008 (UTC)

Also, aren't there animal and dairy subsidies in the U.S.? -- Beland (talk) 07:20, 5 October 2009 (UTC)

Fairness of pay for the farmers.

I heard from a friend of mine that an unfair practice against farmers is taking place where privately-owned food delivery companies, who deliver farm-produced food to stores, charge farmers very high prices to deliver the food to stores, where the farmer has very little in pay to go on and therefore since the farmer has to pay the delivery companies high prices to deliver the food, this leaves the farmer with little to nothing in payment, and therefore it would be very tough for farmers to purchase products to help crop production, such as natural gas for tractors, etc.

Can anybody let me know if this is true, and does anybody know where i can find a source where i may find this out?

Ожиданиесчастья (talk) 05:03, 13 January 2009 (UTC)

That really doesn't have anything to do with agricultural subsidies, and in theory a free market transportation system would reflect the real cost of transporting goods. If you are still curious, the best place to look for coverage of this sort of issue is news outlets, especially if you have a particular location in mind; you can try searching Google News for current or historical stories on the topic. -- Beland (talk) 07:25, 5 October 2009 (UTC)

EU subsidies

"Comparing this number to the revenue obtained from farming (2,1% of 14,91 trillion or 313110000000$), we see that by a small monetary injection from the state, we can attain a export of a value that is 209,7% larger. However, the profits obtained from farming includes everything, thus not solely the value we receive when we would not have given the subsidy. Numbers of this added value alone are not available, as none such research has been conducted."

The EU section is really weird. The first paragraph makes sense, and then it diverts into a dense lecturing monologue, like a copy paste from the middle of a textbook or paper. Can someone fix this? I have the sense that something got accidentally cut or added, and this section needs to be reverted, but I'm not familiar with this page's history.

ManicParroT (talk) 15:07, 4 November 2009 (UTC)

Similarly, I followed the listed reference for "Agricultural subsidies to European farmers and fisheries make up more than 40 percent of the EU budget" and did not find anything to support that claim. Am I missing something? (Ilya12345 (talk) 18:40, 2 December 2009 (UTC))

I'm going to go and delete the quoted chunk of EU info. It simply doesn't improve the article, because it's totally out of context. The reference on EU subsidies is iffy - it's a pie chart, with vague talk about money going to "our natural resources". I suspect that a large chunk of that actually is subsidies, but it isn't very plain.

ManicParroT (talk) 08:16, 12 December 2009 (UTC)

On second thoughts, reading it carefully, I see what they're saying, it's just badly written. I'll edit it for clarity. —Preceding unsigned comment added by ManicParroT (talk • contribs) 08:18, 12 December 2009 (UTC)

I dunno, maybe I'm just stupid. I cut the whole section. If anyone wants to make it legible and put it back in, they're welcome.

ManicParroT (talk) 08:23, 12 December 2009 (UTC)

Do subsidies really increase prices?

The article contained the following statements:

Others argue that a world market with farm subsidies and other market distortions (as happens today) results in higher food prices, rather than lower food prices, as compared to a free market. Joseph Stiglitz, a Nobel laureate in economics, has argued that farm subsidies have a long term effect of raising global food prices, which in fact harms the poor and increases malnutrition. Countries such as India, Brazil or Argentina have comparative advantage in producing agricultural commodities due to their favorable weather conditions. Shifting production to inefficient countries through subsidies could be one mechanism which raises prices.

Now it really isn't clear to me how farm subsidies could possibly result in higher food prices. While they may be more expensive to produce, their prices still should not be higher than "free market prices", because of the subsidies; the prices are determined by the market (free, or not quite so). Furthermore, I searched a little for those Joseph Eugene Stiglitz arguments, but I could find none. Not surprisingly, as I had read a lot of his arguments, some quite obvious, but nothing to the quoted effect, and I strongly doubt that he has ever uttered such egregious nonsense. (Other than that the hidden clenched iron fist of capitalism may destroy those farmers, perhaps.) How on earth may shifting production to inefficient (less efficient?) countries through subsidies increase prices? --84.47.0.88 (talk) 15:00, 17 December 2009 (UTC)

Somebody added a source for that: "Joseph Stiglitz, a Nobel laureate in economics, has argued that farm subsidies have a long term effect of raising global food prices, which in fact harms the poor, increases malnutrition, etc.[25]"

Source [25]: http://www.guardian.co.uk/commentisfree/2006/oct/24/stig

However, I've read that article over, and do not see at all how it endorses that claim. In fact, Stiglitz argues the opposite, that subsidies lower prices. A quote: "Subsidies hurt developing country farmers because they lead to higher output - and lower global prices."

Perhaps he, or others, have said that subsidies will increase prices, but you need to find another source for it. And people shouldn't be adding sources for "citation needed"s that refute the claim in question. Since it's been two years w/out an accurate source, I've deleted that sentence and re-added a citation needed tag. --Cwhalvor (talk) 03:12, 10 April 2011 (UTC)

Subsidy, Not Price Floor

Subsidies and Price Floors are two different phenomena. Under the United States section, it is stated, "The subsidy programs give farmers extra money for their crops and guarantee a price floor." This is not true, as a binding price floor artificially changes the quantity supplied/demanded all the while keeping the price supplied/demanded equal, although higher. A subsidy increases the quantity suppled above equilibrium. This changes the price received by producers and the price paid by consumers with the difference being tax dollars from the government. A price floor benefits the producer at the expense of the consumer. A subsidy benefits both consumers and producers at the expense of tax payers. —Preceding unsigned comment added by 192.146.217.50 (talk) 21:58, 7 March 2011 (UTC)