News Release

September 14, 2005

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Reducing Farm Subsidies and Trade Barriers Would Benefit Americans
Cato experts call for a more market-friendly farm bill

WASHINGTON -- Americans pay a high price for government subsidies of certain farm commodities through direct price supports and tariff rate quotas, according to a study released today by the Cato Institute.

In the Cato Policy Analysis "Ripe for Reform: Six Good Reasons to Reduce U.S. Farm Subsidies and Trade Barriers," Daniel Griswold, Cato's director of the Center for Trade Policy Studies, Stephen Slivinski, Cato's director of budget studies, and Christopher Preble, Cato's director of foreign policy studies, urge the U.S. government to seize the opportunities presented by the Doha Round negotiations of the World Trade Organization and the next reauthorization of the farm bill to reform fundamentally U.S. agricultural policy.

"For the sake of our broader national interest, Congress and the president should reduce, with the ultimate goal of eliminating, all agricultural trade barriers and production subsides," the Cato scholars write. "The long-term interests of Americans as consumers, producers, taxpayers, and citizens of the world should not be continually sacrificed to the short-term interests of a small minority of agricultural producers."

They argue that passing a more market-friendly farm bill would benefit Americans in various ways, which include lowering food prices to tens of millions of American households, especially low-income families, enhancing the environment, and lowering farm trade barriers that would raise incomes of farmers in poor countries and create a more hospitable climate abroad for U.S. foreign policy.

The authors contend that a farm bill with deep cuts in subsidies and trade barriers could also potentially open the door for a comprehensive agreement in the WTO that would open markets abroad for tens of billions more in exports of U.S. services, manufactured goods, and farm products. Repeal of subsidies and trade barriers would free rural communities from dependence on payments that concentrate production in less-competitive commodities that do not provide a foundation for real prosperity.

Trade Policy Analysis no. 30