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Bailouts forever

GB Geo-Blog

Bailouts forever

There has been much negative press regarding the bailouts of auto companies and banks. Yet, one rarely hears any such complaints about the largest recipients of government assistance —  farmers. The agriculture sector in almost every major developed country in the world has been bailed out for decades at total costs well into the trillions of dollars. And there does not appear to be any end in sight.

In Canada the annual costs of federal and provincial government assistance in the form of income supports, price supports, favorable tax rates, quotas, tariffs and other restrictions run in excess of $10 billion. The total annual costs likely exceed $100 billion in both the U.S. and the EU. In the U.S. we have the travesty of tobacco farmers receiving hundreds of millions annually in assistance, while at the same time, federal, state and municipal  governments continue to try to reduce the consumption of tobacco products.

The major stumbling block in the Doha Round of the multilateral trade negotiations is the unwillingness of the governments of the major developed countries to eliminate the assistance provided to farmers. At the same time, the G20 countries talk about the need to help the less developed countries of the world.

Farmers are protected because of their political clout. It is truly staggering how their political influence vastly exceeds their small and declining proportion of the workforces in these countries. Politicians never admit that they are pandering to the farmers when they support the never ending bailouts. Instead, they cast the farmer as the hard working, independent, small businessman who is the backbone of the economy. But most everyone works hard. Very few other small businesses receive even a fraction of the assistance lavished on farmers, some of them being large corporations. And many less developed countries could benefit significantly from real free trade in agricultural products.

Taxpayers and consumers pay twice for the assistance provided, through our taxes and through higher prices for food. But rarely do we complain. Even more rarely do our politicians have the courage to question the need for and the magnitude of the bailouts given every year to farmers.


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1 Comment

  1. Mike Harmon September 9, 2009

    Hello. I was reading someone elses blog and saw you on their blogroll. Would you be interested in exchanging blog roll links? If so, feel free to email me.

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