Why Remove Subsidies?

Griswold, Daniel, Stephen Slivinski, and Christopher Preble. "Ripe for Reform: Six Good Reasons to Reduce U.S. Farm Subsidies and Trade Barriers." Center for Trade Policy Studies. 30 Sept. 2005. Cato Institute. <http://www.freetrade.org/pubs/pas/tpa-030.pdf>.

Today the United States government still subsidizes specific farm commodities through tariff rate quotas which limit imports and direct price supports. (Griswold)  It has been doing this same thing for over 70 years.  What most of the American public does not know is that we pay a high amount to provide these subsidies.    Americans would benefit in six main ways if trade barriers and farm subsidies were reduce in our country.

1) This reform would cause lower food prices for almost all American families.  It would especially impact the lower income families which tend to spend a majority of their income on food.  Last year along, United States food consumers spent $16.2 billion which went directly back to the producers. 

2) Reform would lower costs for all of the industries in American that use agricultural commodities on a daily basis in their products.  The main industry it would benefit would be the food processing industry.  According to Griswold, this would also promote trade negotiations to open more markets abroad for American exporters.

3) The reform during the next ten years would save American taxpayers tens of billions of dollars.  Many Americans think their taxes are going to the smaller, family owned farms, but in reality their money is going to agribusinesses and national large farms.

4) Reform would help the environment.  It would reduce the amount of harmful pesticides and fertilizers used by farms and also trim down the amount of top soil lost.  The newly free farmland could be used for more environmentally friendly purposes, such as recreation and reforestation. 

5) Reform would actually benefit the farmers.  The farmers would have to produce crops that were in high demand by their customers.  Griswold feels this would stimulate innovation and productivity gains on the farm and promote more economic diversity and dynamism in rural communities.

6) The reform would reduce global poverty, raise the incomes of farmers in poor countries, create a more hospitable climate for U.S. foreign policy, and enhance U.S. security.  This all would happen if the farm trade barriers were lowered.