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Republican Agricultural Subsidy Delusions
By Chris | December 2, 2007
I found the Republican CNN/YouTube debates very entertaining. If you missed them you can check out the transcript here. While I disagree with Huckabee on a number of issues, I found him to be very personable and humorous. Thompson had a great sense of humor, but didn’t seem the least bit presidential. The most interesting question of the debate was posed by Ted Faturos from Manhattan Beach, California:
Mmmmmm, nothing says delicious like cheap corn subsidized by the American taxpayer. For a lot of Americans, however, a bitter taste is left in their mouth when they learned about how the U.S. taxpayer bankrolls billions of dollars in farm subsidies that mostly go to large item business interests.
I’m curious which candidate could label themselves fiscally responsible, will endorse the elimination of farm subsidies if they are elected president in 2008.
Only Giuliani and Romney had the opportunity to answer. Romney responds first:
We send products around the world. We’re competing with European and Brazilian and other farmers, and we’re competing in a marketplace where they are heavily subsidized, at great disadvantage for our farmers. And so, if we’re going to change our support structure, we want to make sure that they change their support structure.
Brazilian farmers are heavily subsidized? Hardly.
U.S. farm groups say Brazilian farmers enjoy their own government largesse, as subsidized loans. In total, though, European and American farmers draw much more from the public purse. EU farm spending equals 34% of gross farm receipts, while U.S. programs total 22%, according to the Paris-based OECD. Brazilian farm support equals 3% of farm receipts.
U.S. subsidies are 7 times higher than Brazilian subsidies. Brazil has successfully won WTO disputes against the United States for illegal barriers to trade in cotton and sugar markets. Nonetheless, Brazil exporters faces an average tariff of 27% in developed countries.
Giuliani responds:
The governor’s right. It isn’t a level playing field…And also, we have to be very aware of the fact that we have to have our own supply of food. We can’t be dependent on foreign countries for our food.
Because if we are not careful Cuba might put a naval blockade around the United States and threaten us with starvation until we overturn our market-based economy? When it comes to food, the national defense argument is ridiculous. Food is available from a plethora of different countries, many of which are democratic and free. If Brazil decides to stop supplying us with sugar, we can purchase it from Europe or from one of many Caribbean nations. The withdrawal of a major trading partner might make prices spike temporarily, but in nation where obesity is considered a health epidemic, that might not be such a bad thing.
Topics: Economics, Political Science, Trade | 1 Comment »
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