The Great Decisions 2009 article on the “Global Food Crisis” identifies U.S. agricultural subsidies as an example of a divisive issue between developed countries and developing countries, particularly as they try to negotiate a fair, free trade system.
The U.S. government provides subsidies, or payments, to farmers or agribusinesses (often large-scale, corporate farms) for their crops, especially if the market price of their crop is low. Subsidies allow U.S. growers to continue growing their crops and therefore keep the overall supply of the crop high, in turn keeping the market price down. U.S. laws also require that food aid come from subsidized U.S. crops, which leads to accusations of “dumping.” Farmers in developing countries argue that they cannot compete with U.S. growers who receive subsidies, potentially making them more reliant on international food aid.
In his speech before Congress last night, President Barack Obama stated, that in the next budget he would seek to “…end direct payments to large agribusinesses that don’t need them,” which would reflect a major change in U.S. policy. An article from Reuters looks at President Obama’s remarks, their implications and reactions from groups on all sides of the subsidies debate.
