Ripe for Reform: Six Good Reasons to Reduce U.S. Farm Subsidies and Trade Barriers

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U.S. agricultural policies have remained fundamentally unchangedsince the 1930s. Today the U.S. government continues to subsidizecertain farm commodities through direct price supports and tariffrate quotas that limit imports. Americans pay a high price for thisongoing government intervention in agricultural markets.

Reducing farm subsidies and trade barriers would benefitAmericans in six important ways. One, reform would deliver lowerfood prices to tens of millions of American households, especiallylowincome families that spend a large share of their income onfood. Last year U.S. farm programs transferred $16.2 billion fromU.S. food consumers to producers.

Two, reform would lower costs for U.S. industries, such asconfectioners and other food processors, that use agriculturalcommodities in their final products and would promote tradenegotiations to open markets abroad for U.S. exporters.

Three, reducing farm subsidies would save U.S. taxpayers tens ofbillions of dollars during the next decade. Many of those subsidypayments currently go to large farms and agribusinesses, not tosmaller “family farms.”

Four, agricultural reform would enhance the environment byreducing the amount of top soil lost and damaging fertilizers andpesticides used by American farmers. It would liberate farmland tobe used for reforestation, recreation, and other moreenvironmentally friendly purposes.

Five, agricultural reform would benefit farmers themselves bypromoting production of crops that are in demand by consumers. Farmreform would stimulate innovation and productivity gains on thefarm and promote more economic diversity and dynamism in ruralcommunities.

Six, lower farm trade barriers would raise incomes of farmers inpoor countries, reduce global poverty, create a more hospitableclimate abroad for U.S. foreign policy, and enhance

Congress and the president should seize the opportunitypresented by the Doha Round negotiations of the World TradeOrganization and the next reauthorization of the farm bill tofundamentally reform U.S. agricultural policy.