Agricultural Subsidies and Globalisation

Agricultural subsidies is a very complex and controversial economic topic today. It will continue to be a hot topic as government continues it. It is largely debated in the United States as well as in other countries. The reason it is so largely debated is because it literally have an effect on the entire world market. Not to mention that the farm has been booming the last 5 to 10 years. This topic also tends to draw strong opinions in our area in particular due to the large agricultural community in our region. However, even within different states there are many supporters as well as opponents to these government subsidies.

Globalization is the process of integration arising from the interchange among people, ideas, and culture. Globalization shows that international trade between other countries has impacted the way the U.S is now. Most of the products we use today is made in other countries such as China, Indonesia, and South Korea. As beneficial it may sound to have products made cheap in other countries and sold in the United States at a much higher price. This is also known to have a problem to the factory workers.

Clarke (2007) states the main reasons for subsidies is to ensure a stable income of farmers, to buffer them from the impact of external factors that could ruin their harvest, which is done in the form of a guaranteed minimum price, also known as price ceiling. Moreover, Clarke (2007) claims that food security plays also an important part, since this signifies the self-sufficiency of a nation in certain products, regardless of its comparative advantage in producing those food items. Generally, a comparative advantage is “the ability to produce goods or services at a lower opportunity cost than others”. (Investopedia, 2003) Disregarding the fact that other nations have lower opportunity costs in cultivating for example of grain, countries will cultivate some sort of grain themselves in order to have a lower dependency on imports of other nations. The last reason that Clarke observes is that subsidies are used to protect prices to the consumer. However, it can be said that the government protects the economy as a whole with subsidies. As a price lower than the actual market price faces a higher demand than vice versa. Furthermore, it enables heavily subsidized nations to enter and sell their goods to other countries. This influences the world market and has an impact on

Many support agricultural modernization, as a solution Africa’s, and many other impoverished nations hunger problems. This would include the industrialization of their agricultural industry, using modern, genetically enhanced seeds, and fertilizer. Yet, some of the same groups that are promoting the organic movement in the United States are advocating against the globalization of modern industrial agricultural practices (Paarlberg 179). Those who support modernization of such nations argue that the current process in inefficient, and inadequate. They believe that globalization of the highly capitalized, science-intensive, agricultural system that has been developed in the West, is the answer to the worlds hunger problems. They also warn that if the West abandons its current practices, it may fall victim to famine due to inadequate production (Paarlberg 179). However, supporters of organic production point to the fact that each year, approximately ten million tons of chemical fertilizer are poured onto our corn

19. After reading this chapter, what do you believe are the two greatest obstacles preventing poor countries from becoming rich?

“By 1861, the start of the Civil War, Southern slave plantations supplied more than 80 percent of surging world demand for cotton. Britain alone bought one billion pounds, as did the rest of Europe and the United States.” 3 “The south, able to grow cotton very profitably at much lower price than ever before (or anywhere else), became the natural empire of King Cotton as the demand of the British and New England mills became insatiable.”4 The demand for cotton from England and New England prompted the expansion of cotton farms and plantations that eventually began pushing out the food-crops. Smaller food-crop farmers sold out to larger plantation owners creating a shortage of food growth. The South’s economy began to depend on the cotton crop.

Farm subsidies help farmers to keep the prices of their products low and competitive in the international market. This means that national farmers and their products receive sufficient support and revenue to keep them in business. If this were not the case, there is a danger that retailers will begin to find foreign markets from which to important even basic foods such as corn and meat. The danger here is then that many American

In this research essay the article “Farmers Get Biggest Subsidy Check in Decade as Prices drop,” written by Alan Bjerga. The article brings forward the pressing issues of the agriculture downturn of prices in the United States of America. The article reviews crop surplus and reduced income in terms of the drop of agriculture prices. The article also touches on the fact that the united sates of America agriculture system needs more aid to provide safety for net farmers.

Farm subsidies ARE horrible. Americans can first do themselves a favor and save money by abolishing farm subsidies and trading with developing nations for lower-cost, higher-quality food. This not only puts tax money back into our hands, but we are then able to buy cheaper food, and at the same time help boost an economy of a developing nation. US farm subsidies DO benefit foreign consumers as they get to eat cheaper food that are subsidized by the American taxpayers. While I am all for free market and abolishing subsidies, people need to be more careful in arguing against farm subsidies. Subsidies are wrong because they are paid out of the (unwilling) taxpayers' pockets. Americans are actually doing the rest of the world a great favor by subsidizing them to eat our food.

At one point I feel farm subsidies were justified. However, as technology has advance, so has the ability for farmers to facilitate better yields from their land. With the unknown effects of climate change on the agriculture industry, it may be beneficial to the country to maintain these subsidies. There isn’t a problem until the cost of produce skyrockets. If subsidies for farmers disappear there will certainly be a spike in the price of produce. We as a country should do anything possible to maintain that all citizens have access to reasonably priced agriculture

Agricultural subsidies have existed in the United States for over a hundred years. The 1916 Federal Farm Loan Act provided affordable loans to farmers. Several programs emerged during the New Deal Era that supported the development of crop insurance, limited competition, production controls and much more. A struggling finance industry in the 1980s led to an increase in the government financial support of farms, despite calls from the Reagan administration to cut subsidies. In 1996, the ‘Freedom to Farm’ law drew away from the subsidies and support market supply and demand. However, in the years following, Congress started to again funnel subsidies to the agricultural industry. The original provisions of the 1996 law would have resulted in $47 billion in subsidy cost over 7 years; instead, spending reached well over $120 billion (Orden, Paalberg, Roe, 1999).

The Agriculture sector has changed monumentally over the past century in response to vast economic change and technological advancements. Farm subsidies are various forms of payments from the federal government put in place in an effort to stabilize prices, keep farmers in business, and ensure quality of crops. The federal government currently pays $20 billion in cash each year to US farmers and spent an estimated $250 billion between 1995-2005. Presently, a new farm bill is passed every five years

In late 1920, early 1930’s, the government of the United States of America (USA) first initiated efforts to control the agricultural economy during the great depression. During that period of time, farm prices collapsed and therefore farmers hardly had any income. Subsidies are benefits given by the state to specific groups needing financial aid in form of cash or tax reduction. Subsidies are often considered to be in the interest of the general public. Agricultural subsidies therefore exist to stabilize food prices, ensure a healthy food production, guaranteeing a farmer’s basic income and in general to strengthen the agricultural part of the economies gross domestic product (GDP) (encyclopedia.com, agricultural subsidies).

The distribution of wealth ensuing after agricultural subsidies recognizes the exacerbation of income disparities and denotes the nature of government issues subsidies to divert funds from taxpayers to corporate farms as well as favor large-scale agricultural centers. USDA data shows that farm incomes have soared far above average U.S. incomes. In 2014, the average income of farm households was $134,164, while the average of all US households was which was 77 $75,738 which was 77% of the farm household value. In the concurrent year, the median income of farm households was $81,637, which was 52 percent higher than the U.S. median of $53,657. The disparity between United States farming outlooks displays the divided nature and instability

• Manufacture of raw material – More farmers can be employed for production of domestic cotton.