Agricultural Subsidy Essay

Words: 3037
Pages: 13
Open Document
Agricultural subsidies and tariffs have been widely debated for several years and this is an issue that is not going away. There is no doubt that the subsidies and tariffs have benefits for some while simultaneously being detrimental to others. The chief area of concern is regarding the faceoff between developed nations, such as the United States and the European Union, and underdeveloped or growing nations, such as Brazil and African nations. What essentially is occurring is that a developed nation comes up with a price that they feel an agricultural product should be bought and sold at in the world market. Once they have this figure, if the going rate of the product dips below the number then the governments respond by giving subsidies …show more content…
Therefore, assuming another country has the comparative advantage, i.e. developing countries, developed countries will lose out. Agricultural tariffs have benefitted European farmers as they have been protected from cheaper competition. However, it is argued that the restriction of competition encourages inefficient firms. Therefore, in the long run, domestic firms may not make the necessary improvements that they would have done without tariffs.
Also the introduction of tariffs usually leads to retaliation. Therefore, other countries will place tariffs on EU exports. Therefore, some exporting firms will lose out and sell less exports. If these tariffs are removed, there will be greater levels of exporting. Critics argue that lowering prices from the use of subsidies create unhealthy incentives for consumers. In the USA, cane sugar has been replaced with the cheaper alternative of corn syrup, making high-sugar food cheaper; beet and cane sugar are subject to subsidies, price controls, and import tariffs that distort the prices of these products as well. “Market distortions due to subsidies have led to an increase in corn fed cattle rather than grass fed. Corn fed cattle require more antibiotics and their beef has a higher fat content”, this can make the average consumer less healthy, which is not economically viable. (Kummer, Corby. "Back To Grass" The Atlantic.
Show More

Related Documents: Agricultural Subsidy Essay

Pros And Cons Of Agriculture Subsidies

Agriculture subsidies are money the government gives to farmers, and agribusinesses supplement their income. The agricultural subsidies original purpose was to provide assistance to farmers during the Great depression to ensure food supplies to Americans. However, agricultural subsidies is being misused and taken advantage in this day and age. There are ten crops that are currently subsidized and they are wheat, corn, sorghum, barley, oats, cotton, rice, soybeans, minor oilseeds, and peanuts.…

Words 195 - Pages 1

Essay about imbalance in Agriculture on Agreement and developing countries

actually reduce agricultural trade protection. In addition, AoA is imbalanced in many ways. It has been fashioned in such a way as to enable developed countries to continue high levels of protection, whilst many developing countries have liberalized and their farmers are facing severe and often damaging competition, often from imports artificially cheapened through subsidies(Khor). Therefore, AoA does damage the agricultural development in developing countries, especially the agricultural export in…

Words 1765 - Pages 8

Essay about Case Analysis: Brazil’s Wto Cotton Case: Negotiation Through Litigation

concessions are granted in agricultural products, the most highly subsidized industry in the West. Starting in 2003 however and starting with the efforts of Brazil’s Pedro de Caramago, developing countries began to take a more aggressive and mobilized stance against EU and American subsidization of agricultural products. As a result, the 2nd Doha Rounds in 2006 will be convened to deal specifically with the issue of the overall liberalization of global agricultural markets. However, the degree…

Words 2279 - Pages 10

Kai Zhang W1 Essay example

particular, it includes the economic development of poorer countries, including agriculture, non-agricultural market access, service trade, negotiation rules, dispute resolution, intellectual property, trade and development, and trade and other environmental eight main topics. The key negotiations are in agriculture and non-agricultural market access issues, including reduction of agricultural subsidies, agricultural import tariffs and import tariffs on industrial products in three parts. Though Doha Round…

Words 1129 - Pages 5

Is Free Trade Fair? Essay

2010). The trade distortion in the global agriculture and cotton industry is further analyzed in sections below. Agricultural trade distortion(con) Agriculture forms a vital part of the economies of many developing nations. About 70 percent of people in poor nations depend on agriculture for a living (Devadoss, 2006). The developed and rich nations’ high domestic export subsidies for farmers and import tariffs for foreign agriculture products…

Words 2993 - Pages 12

Different Life Essay

technological evolution . The process of economic development goes through several stages depending on which sector of the economy it is relying on . In the beginning , the economy subsists agricultural output . However the agricultural sector cannot sustain economic development for long because the land available for agricultural activities shrinks as the size of the population grows Therefore, ultimately the government has to rely on technology in to enhance productivity on the land available. For this reason…

Words 760 - Pages 4

Agriculture and United States Essay example

Vocabulary terms: Organic agriculture Key Question 1: What is Agriculture, and Where did Agriculture Begin? Read pages (Black Book: 331-339 / Red Book: 351- 360) and answer the following questions. 1. Who and what consume US agricultural products? Half of the product goes to people and Half go to feeding our cattle 2. Compare/contrast Canada & Guatemala with regards to economic activities. Guatemala - 22.7 percent of the income comes from Agriculture but 50 percent…

Words 2395 - Pages 10

Essay Presentation: Sweden and Local Governments

the companies above belong to agricultural sector and suffer almost the same experience. this let us ponder why it always happen in agriculture stock, here are some reasons: First, Local governments provide extra support on agricultural listed companies. In China, whether central or local governments attach great importance to Industrialization of agriculture, but lots of agricultural industrialization enterprises is not making money on the main business. Subsidies and support funds get from central…

Words 371 - Pages 2

Essay on Knowledge Economy

organizations in a community. Regions that cultivate impactful knowledge economies are able to sell goods and services at a higher profit margin than others Conclusion It is often more expensive for the American consumer to buy African agricultural goods than to buy European produce, even though the actual cost of the African produce is lower when it leaves the continent. The price is increased by import…

Words 966 - Pages 4

Assess The Impact Of This Increase On Businesses In The Developing World

2- Since June of last year corn prices have risen by 60%. Assess the impact of this increase on businesses in the developing world. A commodity is a raw material or primary agricultural product that can be bought and sold without qualitative differentiation across a market, such as gold or wheat. A Commodity also maintains a close universal price regardless of who produces it. The main commodities such as aluminium, cocoa, coffee, copper, corn, copper, cotton crude oil, lead, heating oil, gold,…

Words 2997 - Pages 12