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Subsidies Bad 1

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#1

Subsidies Bad-Index
Subsidies Bad-Index......................................................................................................................................................................1
Laundry List..................................................................................................................................................................................2
Laundry List..................................................................................................................................................................................3
Terrorism/Heg/Bomb Card ...........................................................................................................................................................4
Subsidies=Terrorism......................................................................................................................................................................5
Trade Relations .............................................................................................................................................................................6
Free Trade......................................................................................................................................................................................7
Free Trade......................................................................................................................................................................................8
Trade..............................................................................................................................................................................................9
Developing World........................................................................................................................................................................10
Subsidies make it impossible for other nations to compete with driven down prices...........................................................10
Developing World........................................................................................................................................................................11
Democracy...................................................................................................................................................................................12
Environment/Bio-D.....................................................................................................................................................................13
Environment/Bio-D.....................................................................................................................................................................14
Environment ...............................................................................................................................................................................15
Environment ...............................................................................................................................................................................16
Environment ...............................................................................................................................................................................17
Econ ............................................................................................................................................................................................18
Econ ............................................................................................................................................................................................19
Econ ............................................................................................................................................................................................20
Econ ............................................................................................................................................................................................21
Food Prices..................................................................................................................................................................................22
Food Prices..................................................................................................................................................................................23
Food Prices..................................................................................................................................................................................24
Spending......................................................................................................................................................................................25
Overproduction............................................................................................................................................................................26
Small Farms.................................................................................................................................................................................27
A2: Small Farmers Turn..............................................................................................................................................................28
Most subsidies go to large agribusinesses-not family farms.................................................................................................28
A2: Small Farmers Turn..............................................................................................................................................................29
A2: Small Farmers.......................................................................................................................................................................30
A2: Subsidies Key to Farms........................................................................................................................................................31
A2: Reforms Solve......................................................................................................................................................................32
A2: Kills Farms...........................................................................................................................................................................33
Subsidies Bad 2
ADI Peterson/Perry Lab
#1

Laundry List
Subsidies cause poverty and kill the economy, free trade, and soft power

Griswold 6 [Daniel T., director of the Center for Trade Policy Studies at the Cato Institute, 9/28, “Congress milks taxpayers 
dry”, http://www.freetrade.org/node/488, AVLB]
Abroad, U.S. farm programs drive down global commodity prices by blocking imports and promoting overproduction, 
hurting some of the world's poorest farmers, perpetuating poverty, and needlessly creating ill will toward the United 
States. They have also proven to be a stumbling block in World Trade Organization negotiations, complicating the task of 
opening global markets not only to U.S. farm exports but also to manufacturing and service­industry exports.
Farm producers claim we must hold on to our subsidies and trade barriers as bargaining chips. To open our farm market
before other countries open theirs, they say, would be "unilateral disarmament." But U.S. farm programs are not an asset,
they're a liability: a ball and chain costing the U.S. economy billions of dollars a year. Congress should reduce farm
subsidies and trade barriers regardless of what other countries do. We do not need a permission slip from abroad before we
enact reforms that promote our own national interests.
Earlier House Agriculture Committee hearings featured a handful of non-farm-sector witnesses, but the lopsided lineups help
explain why farm bills remain essentially of the farm lobby, by the farm lobby, and for the farm lobby.
With midterm elections approaching, and phrases like "special interests" back in circulation, congressmen should remember
who they were really elected to serve.
Subsidies Bad 3
ADI Peterson/Perry Lab
#1

Laundry List
Subsidies increase food prices,spending, and global poverty, destroy the environment, rural communities, and soft 
power

Griswold et al. 5 [Daniel, Stephen Slivinski, and Christopher Preble, scholars at the Cato Institute's Center for Trade Policy 
Studies, “Ripe for Reform: Six Good Reasons to Reduce U.S. Farm Subsidies and Trade Barriers”, 9/14, 
http://64.233.167.104/search?q=cache:z1gUW2FsluoJ:www.freetrade.org/pubs/pas/tpa-
030.pdf+Ripe+for+Reform:+Six+Good+Reasons+to+Reduce+U.S.+Farm+Subsidies+and+Trade+Barriers&hl=en&ct=clnk&
cd=2&gl=us&client=firefox-a, AVLB]

U.S. agricultural policies have remained fundamentally unchanged since the 1930s. Today the U.S. government continues to
subsidize certain farm commodities through direct price supports and tariff rate quotas that limit imports. Americans pay a 
high price for this ongoing government intervention in agricultural markets. Reducing farm subsidies and trade barriers would 
benefit Americans in six important ways.

One,reform would deliver lower food prices to tens of millions of American households, especially low­income families that 
spend a large share of their income on food. Last year U.S. farm programs transferred $16.2 billion from U.S. food consumers 
to producers. 
Two, reform would lower costs for U.S. industries, such as confectioners and other food processors, that use agricultural 
commodities in their final products and would promote trade negotiations to open markets abroad for U.S. exporters. 

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

Four,agricultural reform would enhance the environment by reducing the amount of top soil lost and damaging fertilizers and
pesticides used by American farmers. It would liberate farmland to be used for reforestation, recreation, and other more 
environmentally friendly purposes.

Five, agricultural reform would benefit farmers themselves by promoting production of crops that are in demand by 
consumers. Farm reform would stimulate innovation and productivity gains on the farm and promote more economic diversity 
and dynamism in rural communities. 

Six, lower farm trade barriers would raise incomes of farmers in poor countries, reduce global poverty, create a more 
hospitable climate abroad for U.S. foreign policy, and enhance U.S. security.
Subsidies Bad 4
ADI Peterson/Perry Lab
#1

Terrorism/Heg/Bomb Card
Subsidies kill heg and lead to terrorism

Griswold et al. 6[Daniel, Stephen Slivinski, and Christopher Preble, scholars at the Cato Institute's Center for Trade Policy 
Studies, “Six Reasons to Kill Farm Subsidies and Trade Barriers”, February 2, 
http://www.reason.com/news/show/36207.html] AVLB
6. A More Hospitable World

The collective effect of American farm policies is to depress the income of agricultural producers worldwide, exacerbating
poverty in areas, such as sub-Saharan Africa and Central Asia, where people are heavily dependent on agriculture.

The frustration and despair caused by these policies undermine American security. Many people who depend on
agriculture for their survival, both as a source of nourishment and a means of acquiring wealth, perceive U.S. farm policy
as part of an anti-American narrative in which Washington wants to keep the rest of the world locked in poverty.
Indeed, in a survey of anti-American sentiment around the world, the Pew Research Center found a majority of respondents
in more than a dozen countries were convinced that U.S. farm and trade policies increased the "poverty gap" worldwide.
These sentiments transcended geographic, ethnic, or religious boundaries. In such an environment, terrorist ringleaders
find fertile ground for their message of hate and violence.

Nicholas Stern, chief economist at the World Bank, is blunt about America's leadership role. "It is hypocritical to preach the
advantages of free trade and free markets," Stern told the U.N. publication Africa Recovery, "and then erect obstacles in
precisely those markets in which developing countries have a comparative advantage." Johan Norberg, of the Swedish
think tank Timbro, argues that farm protection in developed countries amounts to a "deliberate and systematic means of
undermining the very type of industry in which the developing countries do have comparative advantages." (See "Poor Man's
Hero," December 2003.)

American subsidies and tariffs amount to much more money than its foreign aid to the developing world. According to 
Oxfam, "in crop year 2002, the U.S. government provided $3.4 billion in total subsidies to the cotton sector," including about 
25,000 growers. "To put this figure into perspective," Oxfam says, "it is nearly twice the total amount of U.S. foreign aid 
given to sub­Saharan Africa. It is also more than the GDP of Benin, Burkina Faso, or Chad, the main cotton­producing 
countries in the region." The subsidies drive down world cotton prices, costing developing countries billions of dollars in lost 
export earnings.

 Poor countries don't want our pity; they want our respect.  To the extent that American security depends on the expansion
    
of liberal democratic institutions and free market economics, Washington must be particularly sensitive to policies 
that exacerbate poverty in the developing world.
Subsidies Bad 5
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#1

Subsidies=Terrorism
Preserving subsidies leads to terrorism
Segal 7 [Hugh, Canadian Senator and member of the Standing Senate Committee on Foreign Affairs and International Trade, “A Better Way to Help
Africa,” National Post, EDITORIALS; Pg. A20, lexis, AVLB]

Africa cannot be left to wallow in a morass of bad governance, corruption, disease and global neglect. In strategic terms, the
dire situation in Africa creates the risk of more failed states and the spread of terrorism. It also threatens democracy and
creates huge, potentially destabilizing, migratory pressures.
Africa has the mineral wealth, agricultural potential and popular will necessary to move toward a promising future. But
realizing this goal requires improved governance, a more effective fight against corruption, targeted job creation and the
reduction of Western agricultural barriers to African exports. It also requires Canada to look at our African policy, separate
the strengths from the weaknesses, and move ahead as an influential aid partner. Above all, we should understand that the
remoteness of Africa geographically has no bearing on its importance to us strategically. Many of our commonwealth and
francophone brothers and sisters are among those countries with the greatest need and potential.
Subsidies Bad 6
ADI Peterson/Perry Lab
#1

Trade Relations
Subsidies kill trade relation and close markets to American products

Edwards 7 [Chris, director of Tax Studies at CATO, “Agricultural Subsidies”, 6/13,


http://www.cato.org/downsizing/agriculture/agriculture_subsidies.html, AVLB]

4. Farm Subsidies Damage U.S. Trade Relations. Global stability and U.S. security are enhanced when less developed
countries achieve stronger economic growth. America can further that end while helping itself by encouraging the lowering
of trade barriers and the expansion of trade by poor nations. However, U.S. and European farm subsidies and agriculture
import barriers are a serious hurdle to making progress in global trade agreements. U.S. sugar protections, for example,
benefit only a very small group of U.S. growers but are blocking broader free trade within the Americas.

The World Trade Organization estimates that even a one-third drop in all tariffs around the world would boost global output
by $686 billion, including $164 billion for the United States.30 Trade liberalization would boost the exports of U.S. goods
that are competitive on world markets, including many agricultural products, but U.S. farm subsidies and protections stand in
the way of that goal.
Subsidies Bad 7
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#1

Free Trade
Plan will liberalize trade and will be modeled

Markheim and Riedl 7 [Daniella, Jay Van Andel Senior Analyst in Trade, and Brian M. Riedl, Gover M.  Hermann Fellow 
in Economic Policy Studies at The Heritage Foundation, February 5th, “Farm Subsidies, Free Trade, and the Doha Round”, 
 http://www.heritage.org/RESEARCH/BUDGET/wm1337.cfm , AVLB]    

Though farm policy reform will be difficult at best to achieve, it would have two positive benefits. It would end nonsensical, 
distorted subsidies for a handful of select crops, resulting in a more equitable domestic market. Unilateral reductions in farm 
subsidies and bailouts would give U.S. trade negotiators the second benefit: ammunition to break the impasse over agriculture 
protection with the EU and other countries in world trade talks, allowing them to continue to credibly lead the world in 
opening global markets. Successful conclusion of the current WTO round of negotiations would also expand economic 
opportunity and economic freedom and promote prosperity for all nations
Subsidies Bad 8
ADI Peterson/Perry Lab
#1

Free Trade
Decreasing farm payments key to free trade­that's key to the economy and efforts

Markheim and Riedl 7 [Daniella, Jay Van Andel Senior Analyst in Trade, and Brian M. Riedl, Gover M.  Hermann Fellow 
in Economic Policy Studies at The Heritage Foundation, February 5th, “Farm Subsidies, Free Trade, and the Doha Round”, 
 http://www.heritage.org/RESEARCH/BUDGET/wm1337.cf   AVLB]   

Two vital policy issues are at stake in the U.S. Farm Bill: limiting the size of government and advancing world trade. 
Defending free trade and fighting for further trade liberalization should be a top priority for Congress this year. Expanding 
global trade is one of the keys to building a stronger economy at home and promoting better relationships abroad. 
Specifically, reducing the burdens of the Farm Bill would be a breakthrough in the Doha Round. The President has proposed 
some good, albeit small, steps for Congress to consider, but much more should be done to achieve a sensible market­based 
farm policy.
Subsidies Bad 9
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#1

Trade
Farm subsidies hurt US position in global trade talks
Andrew Cassel, August 1, 2008, Why U.S. Farm Subsidies Are Bad for the World, Newscenter 

Boosting farm subsidies here will be enormously damaging to the U.S. position in global trade talks, 
where our negotiators have been trying to get other countries to reduce their own agricultural subsidies.

Europe and Japan, for instance, would buy more American farm products if their own farmers weren't so 
heavily protected by tariffs and subsidies. And lowering such trade barriers in the world's richer 
countries would enable poorer nations in Africa, the Caribbean and elsewhere to grow by exporting 
more of their own products.
Subsidies Bad 10
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#1

Developing World
Subsidies make it impossible for other nations to compete with driven down prices
Andrew Cassel, August 1, 2008, Why U.S. Farm Subsidies Are Bad for the World, Newscenter

The farm bill, which the House of Representatives has approved and which the Senate could vote 
on this week, calls for taxpayers to fork over some $180 billion to farmers during the next 
decade. That's a 70 percent hike above the cost of current farm­subsidy programs, most of which 
represent direct payments to wealthy farmers and agribusinesses.

Those subsidies make it possible to export millions of tons of food so cheaply that native farmers 
in places such as Jamaica can't possibly compete.

By guaranteeing U.S. farmers a minimum payment for commodities such as corn, rice and 
soybeans, the government encourages overproduction. That drives down the market price, 
forcing even higher subsidies and creating surpluses that can be shipped to Jamaica and 
elsewhere.
Subsidies Bad 11
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#1

Developing World
Subsidies cost the developing world $350 billion annually
Susan E. Rice and Gayle E. Smith, May 30, 2003, Agricultural subsidies : Stop the trans-Atlantic food fight,
International Herald Tribune

President George W. Bush echoed his nemesis, President Jacques Chirac of France, last week when he called on
"all developed nations, including our partners in Europe," to "immediately eliminate subsidies on agricultural
exports to developing countries so that they can produce more food to export" and "feed their own people." Chirac
had offered an equally hollow proposal on Feb. 22 when he urged rich countries to temporarily stop subsidizing
agricultural exports to poor African countries.
If both leaders were serious, their convergence on this important issue at the Group of Eight summit meeting
starting Sunday in Evian, France, could not only spur improved cooperation between the United States and
Europe but also lead to a new lease on life for the world's poorest. According to the World Bank, rich countries'
agricultural subsidies cost the developing world $350 billion each year, dwarfing the $50 billion in assistance the
developed world provides annually to all poor countries.
Subsidies Bad 12
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#1

Democracy
Subsidies kill democracy-allows politicizing to take over the process

Posner 8 [Richard A., senior lecturer at University of Chicago Law School and judge, “The Outlandish Far

This of course will not happen, and that is a lesson in the limitations of democracy, at least as practiced in the United States at
this time, though I doubt that it is peculiarities of American democracy that explain the farm programs, for their European
counterparts are far more generous. The small number of American farmers is, paradoxically, a factor that facilitates their
obtaining transfer payments from taxpayers. They are so few that they can organize effectively, and being few the average
benefit they derive (the $50,000 a year) creates a strong incentive to contribute time and money to securing the subsidies. The
free-rider problem that plagues collective action is minimized when the benefit to the individual member of the collective
group is great. Then too many of the members of the farm community and hence recipients of the subsidies are wealthy, and
the wealthy have great influence in Congress as a result of the lack of effective limitations on private financing of
congressional campaigns and on lobbying generally. In addition, the allocation of two senators to each state regardless of
population enhances the political power of sparsely populated states, which tend to be disproportionately agricultural. The
key role of Iowa in the presidential electoral process is a further barrier to the abolition of farm subsidies, and the final factor
is the alliance of urban with farm interests in support of the food-stamp program, itself inferior to a negative income tax,
which would give the poor money but allow them to make their own consumption choices.
Subsidies Bad 13
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#1

Environment/Bio-D
Agricultural subsidies threaten wildlife populations in developing countries
Borders and Burnett, 2006. [Max and H. Sterling, adjunct scholar and senior fellow with the National Center for Policy
Analysis, "Farm Subsidies: Devastating the World's Poor and the Environment," National Center for Policy Analysis, March
24, http://www.ncpa.org/pub/ba/ba547/]

In addition, wildlife populations in developing countries are devastated as an indirect result of agricultural subsidies. At
current prices, poaching often provides more revenue than farming and wildlife is frequently seen as competition for land and
a threat to crops. Furthermore, farmers are often unable to afford fertilizers and pesticides that increase the available yield
from a given amount of land — thus they must use more and more land just for subsistence agriculture.
Subsidies Bad 14
ADI Peterson/Perry Lab
#1

Environment/Bio-D
Agricultural subsidies threaten wildlife populations in developing countries
Borders and Burnett, 2006. [Max and H. Sterling, adjunct scholar and senior fellow with the National Center for Policy
Analysis, "Farm Subsidies: Devastating the World's Poor and the Environment," National Center for Policy Analysis, March
24, http://www.ncpa.org/pub/ba/ba547/]

In addition, wildlife populations in developing countries are devastated as an indirect result of agricultural subsidies. At
current prices, poaching often provides more revenue than farming and wildlife is frequently seen as competition for land and
a threat to crops. Furthermore, farmers are often unable to afford fertilizers and pesticides that increase the available yield
from a given amount of land — thus they must use more and more land just for subsistence agriculture.

U.S. farm subsidies are detrimental to the environment.


According to the World Trade Organization, "higher subsidies, such as
provided for in the 2002 U.S. Farm Bill, lead to an intensification of
agricultural production in OECD countries which can generally be
considered detrimental to the environment in terms of exposure to
pesticides and fertilizers, habitat destruction and land
degradation…."

Indeed, in order to produce more, farmers convert wetlands to


agriculture, intensively use fertilizers and pesticides, and divert
water from rivers and streams. For example:

Roughly half of U.S. wetlands lost from 1986 to 1997 — more than
300,000 acres — were converted to agricultural use.
Fertilizer and pesticide runoff from farmlands contribute to
destructive algal blooms and the 7,000-square-mile dead zone that
appears every summer in the Gulf of Mexico off the coasts of Louisiana
and Texas.
Subsidized water diversion for irrigation in California has
contributed to a 60 percent to 80 percent decline in fish populations
in the Trinity River and record low numbers for many species in the
San Francisco Bay-Delta ecosystem.
Subsidies Bad 15
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#1

Environment
Farm subsidies kill the environment and rural economies

Griswold 6 [Daniel T., director of the Center for Trade Policy Studies at the Cato Institute, 9/28, “Congress milks taxpayers 
dry”, http://www.freetrade.org/node/488, AVLB]

Overproduction caused by farm subsidies also harms the environment through increased soil erosion, overuse of pesticides 
and fertilizers, "dead zones" in the Gulf of Mexico, and the waste of fresh water resources.

Moreover, none of these programs has delivered the "rural development" that every farm bill promises. In fact, farm payments 
have sapped vitality from rural communities by consolidating production in a few capital­intensive commodities, slowing 
growth and job creation. An analysis by a center at the Federal Reserve Bank of Kansas City found that, within U.S. counties, 
"[farm] payments appear to be linked with subpar economic and population growth."
Subsidies Bad 16
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#1

Environment
Subsidies destroy the environment-more land is cultivated and more pesticides are used

Edwards 7 [Chris, director of Tax Studies at CATO, “Agricultural Subsidies”, 6/13,


http://www.cato.org/downsizing/agriculture/agriculture_subsidies.html, AVLB]

5. Farm Programs Damage the Environment. Federal farm policies are thought to damage the natural environmental in
numerous ways.31 Subsidy programs, particularly price guarantee programs, cause overproduction, which draws marginal
farmland into active production. Similarly, trade barriers induce agriculture production on land that is less naturally
productive. As a result, marginal lands that might otherwise be used for parks or forests are locked into farm use because
farm subsidy payments get capitalized into higher prices for land.

Subsidies are also thought to induce excessive use of fertilizers and pesticides. Producers in regions that have more optimal
soils and climates tend to use less fertilizers and pesticides than do producers who are induced by subsidies to farm in less
favorable locations. An excessive use of chemicals can contaminate lakes, rivers, and other water systems.

Florida sugar provides a good example. Large areas of wetlands have been converted to cane sugar production because of
artificially high domestic sugar prices. Unfortunately, the phosphorous in fertilizers used by sugar farmers has caused
substantial damage to the Everglades. Farming, like any industry, can cause negative environmental impacts, but it is
misguided for federal policy to exacerbate those problems.
Subsidies Bad 17
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#1

Environment
Subsidies destroy the environment­pesticide use and water usage prove

Griswold et al. 5 [Daniel, Stephen Slivinski, and Christopher Preble, scholars at the Cato Institute's Center for Trade Policy 
Studies, “Ripe for Reform: Six Good Reasons to Reduce U.S. Farm Subsidies and Trade Barriers”, 9/14, 
http://64.233.167.104/search?q=cache:z1gUW2FsluoJ:www.freetrade.org/pubs/pas/tpa­
030.pdf+Ripe+for+Reform:+Six+Good+Reasons+to+Reduce+U.S.+Farm+Subsidies+and+Trade+Barriers&hl=en&ct=clnk&
cd=2&gl=us&client=firefox­a, AVLB]

4. More Environmentally Friendly Land Use 
The distortions and perverse incentives of U.S. agricultural policies have encouraged practices that damage the 
environment. Trade barriers and subsidies stimulate production on marginal land, leading to overuse of pesticides,
fertilizers, and other effluents. A central if unstated purpose of American farm policy is to promote production of 
commodities that would not be economical under competitive, free market conditions.This often means
emphasizing crops better grown elsewhere, requiring more chemical assistance. 
Overuse of fertilizers and pesticides adds to runoff that pollutes rivers, lakes, and oceans. According to the World 
Resources Institute, agriculture is the biggest source of river and lake pollutants in the United States. A study by
the Environmental Protection Agency found that 72 percent of U.S. rivers and 56 percent of lakes it surveyed 
suffer from agriculture­related pollution. Areas of the Gulf of Mexico have become "dead zones" because of the 
runoff from farms in the Midwest. Even where fertilizers and pesticides are not used intensively, the mere act of
plowing soil eliminates forest and grass cover, leaving soil exposed for weeks at a time and vulnerable to erosion. 
Erosion can build up silt in nearby rivers and downstream lakes. 
Domestic sugar protection has maintained a concentration of producers in central Florida who have used up water
from the endangered Florida Everglades while spitting back phosphorous content far above the level consistent
with maintaining the surrounding ecosystem. The high runoff has seriously reduced periphyton, such as algae, that 
supports birds and other animal life. Congress has spent billions to repair the damage caused to the Everglades by 
the protected sugar industry. 
Farm programs also waste scarce water resources, especially in the arid West. Agricultural water subsidies alone 
amount to around $2 billion annually, propping up such uneconomical enterprises as growing cotton in the Arizona
desert. 
Finally, farm programs crowd out more environmentally friendly land uses by artificially driving up land prices. A 
sizeable share of the increased income that protection and subsidies deliver to farms becomes "capitalized" 
through higher land values, because the subsidies increase the stream of income that land can produce. Higher 
prices for farmland, in turn, render it more expensive to acquire and maintain environmental preserves, parkland, 
forests, or other land use alternatives that would be more likely to preserve habitat and biodiversity. By keeping 
marginal farmland under cultivation, the government has slowed the trend of reforestation.
Subsidies Bad 18
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Econ 

Subsidies kill economies of developing nations

Borders, Burnett 3­24­06 Farm Subsidies:Devastating the World's Poor
and the Environment:National Center For Policy Analysis
Max Borders is an adjunct scholar and H. Sterling Burnett is a senior
fellow with the National Center for Policy Analysis. 

Every dollar, yen or euro poured into the agriculture sectors of rich
nations makes developing countries' farm sectors that much less
competitive. The "dumping" of agricultural commodities at prices lower
than the cost of production is devastating to developing countries,
since most depend almost entirely on only one or a few products. Every
year, farm subsidies cost developing countries about $24 billion in
lost agricultural income. Cotton is an excellent example:

World cotton prices have fallen by half since the mid-1990s and,
adjusted for inflation, are now lower than at any time since the Great
Depression of the 1930s.
Despite the plunge in prices, cotton production in the United States
grew 42 percent between 1998 and 2001.
Due to subsidies, American cotton farmers receive up to 73 percent
more than the world market price for their crop. To compensate for
falling prices, U.S. cotton subsidies have doubled since 1992, and in
2001-2002 America's 25,000 cotton farmers received a $230 subsidy for
every acre of cotton planted — a total of $3.9 billion. By comparison,
wheat and maize subsidies amount to $40 to $50 per acre.
Subsidies Bad 19
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Econ 
Ag subsidies kill econ growth in the developing world

Borders, Burnett 3­24­06 Farm Subsidies:Devastating the World's Poor
and the Environment:National Center For Policy Analysis
Max Borders is an adjunct scholar and H. Sterling Burnett is a senior
fellow with the National Center for Policy Analysis.

Subsidized agriculture in the developed world is one of the greatest


obstacles to economic growth in the developing world," said NCPA
Senior Fellow H. Sterling Burnett, who co-authored the report.
"American cotton subsidies cost sub-Saharan Africa $302 million in
2001 and 2002 alone.

According to the NCPA report, subsidies encourage overproduction.
Surplus crops are then sold below the cost of production, depressing
world prices. As a result, countries with unsubsidized goods are
essentially shut out of world markets, devastating their local
economies.

"Right now, developed countries like the United States contribute over
$50 billion annually in foreign aid to underdeveloped countries," said
Max Borders, NCPA adjunct scholar and the report's other co­author.
"If developed nations reduced their subsidies and eliminated trade
barriers, this aid would be unnecessary, and rural poverty would be
reduced." 
Subsidies Bad 20
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Econ
Farm subsidies collapse domestic and global economy

Edwards 7 [Chris, director of Tax Studies at CATO, “Agricultural Subsidies”, 6/13,


http://www.cato.org/downsizing/agriculture/agriculture_subsidies.html, AVLB]

2. Farm Subsidies Damage the Economy. The extent of federal micromanagement of the agriculture sector is probably
unique in America industry. In most industries, market prices balance supply and demand, profit levels signal investment
opportunities, market downturns lead to cost cutting, and entrepreneurs innovate to provide better products at lower prices.
All of those market mechanisms are blunted or nonexistent in government-controlled agriculture markets. As a result, federal
agriculture policies produce substantial "deadweight losses" and reduced American incomes.

Farm programs result in overproduction, overuse of marginal farmland, and land price inflation, which results from subsidies
being capitalized in land values. Subsidy programs create less efficient planting, induce excess borrowing by farmers, cause
insufficient attention to cost control, and result in less market innovation. And policies often work against the claimed goals
of Congress. As an example, while members of Congress say that they support small farms, owners of large farms receive the
largest subsidies, and that has given them the financing they need to merge with and acquire smaller farms.23

In 2006 the Congressional Budget Office reviewed major studies that examined repeal of U.S. and foreign agriculture 
subsidies and trade barriers.24 The CBO found that all the studies they reviewed showed that both the U.S. and global 
economies would gain from the repeal of subsidies and trade barriers.
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Econ
Ending farm subsidies would boost the global economy by 100 billion dollars
Borders and Burnett, 2006. [Max and H. Sterling, adjunct scholar and senior fellow with the National Center for Policy
Analysis, "Farm Subsidies: Devastating the World's Poor and the Environment," National Center for Policy Analysis, March
24, http://www.ncpa.org/pub/ba/ba547/]

Conclusion. Farm subsidies eat up federal revenue and make little, if any, economic sense. They also hold back progress in
developing countries and result in severe environmental damage. Ending subsidies would benefit the federal budget, third-
world farmers and the environment. The International Monetary Fund (IMF) estimates that eliminating various agriculture
subsidies in rich countries would raise global welfare $100 billion.
Subsidies Bad 22
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Food Prices

Subsidies increase food prices

Griswold 6 [Daniel T., director of the Center for Trade Policy Studies at the Cato Institute, 9/28, “Congress milks taxpayers 
dry”, http://www.freetrade.org/node/488, AVLB]

Trade barriers and domestic price supports also force tens of millions of families to pay higher food prices. According to the 
Organization for Economic Cooperation and Development, U.S. farm programs transferred an average of $10.5 billion a year 
from U.S. food consumers to producers from 2003 through 2005. That amounts to an annual food tax of $140 for a family of 
four ­­ a regressive tax that falls most heavily on poor families that spend a larger share of their budgets on food.

Artificially high food prices also drive up production costs for the U.S. food processing firms, reducing their competitiveness 
and jeopardizing jobs. A recent report from the U.S. Commerce Department shows that import quotas have cost thousands of 
American jobs in sugar­using industries. Tens of thousands of U.S. bakeries, restaurants, and other businesses suffer lost sales 
and reduced profitability because of artificially high prices they must pay for food commodities.
Subsidies Bad 23
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Food Prices
Farm payments prop up food prices and destroy trade liberalization

Markheim and Riedl 7 [Daniella, Jay Van Andel Senior Analyst in Trade, and Brian M. Riedl, Gover M.  Hermann Fellow 
in Economic Policy Studies at The Heritage Foundation, February 5th, “Farm Subsidies, Free Trade, and the Doha Round”, 
 http://www.heritage.org/RESEARCH/BUDGET/wm1337.cfm  ,     AVLB]
   

Worldwide Cost of Farm Subsidies

Global barriers to trade in agricultural products artificially prop up domestic prices for food and food products. They raise the
cost of living for families forced to buy food products that are made overly expensive in these distorted markets. According
to a 2004 OECD study, U.S. farm programs resulted in higher food prices and had the effect of transferring more than $16
billion from American households to domestic farmers over and above what the farmers received from direct government
assistance.[10] This is in addition to the $25 billion annual cost to taxpayers.

Barriers to agricultural trade are not only a burden on American households. They also depress world prices of agricultural 
products, negatively affecting farmers in developing countries and blocking their efforts to rise from poverty and improve 
their living standards. The U.S. argues for free trade and economic liberalization, and yet it refuses to eliminate the very 
policies that would truly allow developing countries to pursue and achieve economic prosperity. William Cline of the Institute 
for International Economics has estimated that by removing trade barriers, developed countries would convey economic 
benefits to developing countries that are worth about twice the  amount of their annual aid transfers.
Subsidies Bad 24
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Food Prices
Subsidies create higher food prices in the U.S.­especially affects poor consumers

Griswold et al. 5 [Daniel, Stephen Slivinski, and Christopher Preble, scholars at the Cato Institute's Center for Trade Policy 
Studies, “Ripe for Reform: Six Good Reasons to Reduce U.S. Farm Subsidies and Trade Barriers”, 9/14, 
http://64.233.167.104/search?q=cache:z1gUW2FsluoJ:www.freetrade.org/pubs/pas/tpa­
030.pdf+Ripe+for+Reform:+Six+Good+Reasons+to+Reduce+U.S.+Farm+Subsidies+and+Trade+Barriers&hl=en&ct=clnk&
cd=2&gl=us&client=firefox­a, AVLB]

1. Lower Food Prices for American Families 
The foremost reason to curtail farm protectionism is to benefit American consumers. By shielding the domestic 
market from global competition, government farm programs raise the cost of food and with it the overall cost of 
living. According to the Organization for Economic Cooperation and Development, the higher domestic food prices 
caused by U.S. farm programs transferred $16.2 billion from American consumers to domestic agricultural
producers in 2004.That amounts to an annual "food tax" per household of $146. This consumer tax is paid over 
and above what we dole out to farmers through the federal budget. 
American consumers pay more than double the world price for sugar. The federal sugar program guarantees 
domestic producers a take of 22.9 cents per pound for beet sugar and 18 cents for cane sugar, while the world 
spot price for raw cane sugar is currently about 10 cents per pound. A 2000 study by the General Accounting 
Office estimated that Americans paid an extra $1.9 billion a year for sugar due to import quotas alone. 
American families also pay more for their milk, butter, and cheese, thanks to federal dairy price supports and
trade barriers. The federal government administers a byzantine system of domestic price supports, marketing
orders, import controls, export subsidies, and domestic and international giveaway programs. According to the 
U.S. International Trade Commission, between 2000 and 2002 the average domestic price of nonfat dry milk was 
23 percent higher than the world price, cheese 37 percent higher, and butter more than double. Trade policies also 
drive up prices for peanuts, cotton, beef, orange juice, canned tuna, and other products. 
These costs are compounded by escalating tariffs based on the amount of processing embodied in a product. If the 
government allowed lower, market prices for commodity inputs, processed foods would be substantially cheaper.
Lifting sugar protection, for example, would apply downward pressure on the prices we pay for candy, soft drinks, 
bakery goods, and other sugarcontaining products. 
The burden of higher domestic food costs falls disproportionately on poor households. Farm protections act as a 
regressive tax, with higher prices at the grocery store negating some or all of the income support the government 
seeks to deliver via programs such as food stamps. 
If American farm subsidies and trade barriers were significantly reduced, millions of American households would
enjoy higher real incomes. 
Subsidies Bad 25
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Spending
Decreasing subsidies would curb government spending­this reform affects huge agribusinesses, not small farmers

Griswold et al. 5 [Daniel, Stephen Slivinski, and Christopher Preble, scholars at the Cato Institute's Center for Trade Policy 
Studies, “Ripe for Reform: Six Good Reasons to Reduce U.S. Farm Subsidies and Trade Barriers”, 9/14, 
http://64.233.167.104/search?q=cache:z1gUW2FsluoJ:www.freetrade.org/pubs/pas/tpa­
030.pdf+Ripe+for+Reform:+Six+Good+Reasons+to+Reduce+U.S.+Farm+Subsidies+and+Trade+Barriers&hl=en&ct=clnk&
cd=2&gl=us&client=firefox­a, AVLB]

3. Budget Savings and Equity for U.S. Taxpayers 
Agricultural reform also would reduce the cost of government.The Office of Management and Budget estimates 
that taxpayers shelled out an expected $26 billion in direct agricultural subsidies in fiscal year 2005­the biggest 
single­year subsidy bill since 1986. Just nine years ago, Congress promised to phase out farm subsidies by 2003. 
Instead they've reached near­record highs.
Subsidy levels before 1996 were set by a formula that triggered an increase when crop prices fell. Starting in
1995, crop prices began to rise, resulting in lower payments from the federal government. The Freedom to Farm 
Act, passed in 1996 when commodity prices were high and demand for subsidies low, ended the price support 
program and replaced it with a declining fixed payment unrelated to market prices. Payouts were scheduled to 
drop from $5.6 billion in 1996 to $4 billion by 2002 and then disappear. 
But Congress reversed course in 1998, when crop prices began to decline, passing an "emergency" supplemental 
bill that raised total farm subsidies to $12.4 billion. Subsequent supplemental hiked handouts to new heights,
totaling more than $76 billion between 1999 and 2002, a whopping $57 billion more than the Freedom to Farm Act 
originally mandated. 
In May 2002, President George W. Bush hammered the final nail into Freedom to Farm, signing a six­year 
appropriation that revived the old price support program. Taxpayers have coughed up $55.5 billion hi the three 
fiscal years since. For the same money Congress paid to farmers during the "phase­out" period between 1995 and
2003, the federal government could have purchased outright more than a quarter of the country's farms. 
Yet two­thirds of American farmers don't even receive subsidies. So where does all that tax money go? Mainly to
large agribusinesses and the richest family farmers. In 2003, the most recent year for which comprehensive 
statistics are available, the top 10 percent of all subsidy recipients gobbled up 68 percent of the money, and the 
top 5 percent got 55 percent. 
Take, for instance, Riceland Foods in Stuttgart, Arkansas, the largest single recipient of farm welfare. In 2003 it
received $68.9 million in subsidies for producing rice, soybeans, wheat, and corn­more than all the farmers in 
Rhode Island, Hawaii, Alaska, New Hampshire, Connecticut, Massachusetts, Maine, Nevada, and New Jersey 
combined.
The second­largest recipient of farm welfare in 2003 was Producers Rice Mill, also in Stuttgart, Arkansas, which 
received $51.4 million. The agricultural welfare rolls also include many Fortune 500 companies, such as Archer 
Daniels Midland and International Paper, plus corporations most people don't associate with farming, such as 
Chevron, Caterpillar, and Electronic Data Systems. 
From the taxpayer's perspective, there is no good reason why the federal government should continue to subsidize 
farmers or companies, especially those that can remain profitable on their own. 
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Overproduction
Subsidies cause overproduction and destroy economic competitiveness

Edwards 7 [Chris, director of Tax Studies at CATO, “Agricultural Subsidies”, 6/13,


http://www.cato.org/downsizing/agriculture/agriculture_subsidies.html, AVLB]

The extensive federal welfare system for farm businesses is costly to taxpayers and creates distortions in markets. Subsidies
induce farmers to overproduce, which pushes down prices and creates demands for further subsidies. Subsidies inflate land
prices in rural America. And the flow of subsidies and regulations from Washington hinders farmers from innovating, cutting
costs, diversifying their land use, and taking the actions needed to prosper in a competitive global economy.

The distortions caused by federal farm policies have long been recognized. In 1932 a member of Congress noted that the 
Agriculture Department spent "hundreds of millions a year to stimulate the production of farm products by every method, 
from irrigating waste lands to loaning and even giving money to the farmers, and simultaneously advising them that there is 

 no adequate market for their crops, and that they should restrict production."    The folly is the same seven decades later,
  
except that the subsidies have increased from "hundreds of millions" to tens of billions of dollars. 
Subsidies Bad 27
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Small Farms
Farm subsidies lead to corporate consolidation of farms-killing small farms

Reidl 7 [Brian M., Grover M. Hermann Fellow in Federal Budgetary Affairs in the Thomas A. Roe Institute Foundation,
“How Farm Subsidies Harm Taxpayers, Consumers, and Farmers, Too”
http://www.heritage.org/Research/Agriculture/bg2134.cfm ]

Farm subsidies are intended to raise farmer incomes by making up for low crop prices. Instead, subsidies promote
overproduction, lowering prices even further. Expensive programs to restrict plantings are then implemented to raise prices
again. Ethanol mandates raise prices further.

Farm subsidies are intended to help struggling family farmers. Instead, they harm those farmers by excluding them from most
subsidies; financing the consolidation of small, individually owned farms into business conglomerates; and raising land
values to levels that prevent young people from entering farming.

Farm subsidies allegedly are intended to be consumer- and taxpayer-friendly, but they cost Americans billions of dollars each
year in higher taxes and higher food costs.

 The farm bill does not address any of these short comings. Washington would continue to spend approximately $25 billion
    
annually to subsidize a small, elite group of farmers through policies that do nothing to help the farm economy.
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A2: Small Farmers Turn

Most subsidies go to large agribusinesses-not family farms


Griswold 6 [Daniel T., director of the Center for Trade Policy Studies at the Cato Institute, 9/28, “Congress milks taxpayers
dry”, http://www.freetrade.org/node/488, AVLB]

A hearing in the House Agricultural Committee last week highlighted everything wrong with U.S. farm policy. In preparation
for writing the 2007 farm bill, House members heard from 17 witnesses representing every possible farm lobby --from cotton
to corn, sugar to potatoes, rice to eggs, and sorghum -- but not a single spokesperson for the interests of the American people
as a whole.
Fewer than two percent of Americans farm for a living, and only a third of those farmers receive subsidies. Yet the interests
of subsidized and protected farmers dominate every farm bill discussion in Washington. The broader interests of the United
States and the other 98 percent of Americans are systematically ignored.
The biggest losers from U.S. farm policy are taxpayers. From 2000 to 2005, Congress spent an average of $17 billion a year
in direct payments to farmers. That's real money, even in Washington. Most of those payments did not go to small "family
farms," but to large operations and agribusinesses, including some Fortune 500 companies. Indeed, according to the
Environmental Working Group, the top 10 percent of recipients collected two-thirds of the payments on offer, and the top 5
percent collected 55 percent.
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A2: Small Farmers Turn


Agriculture subsidies are America's largest corporate welfare program-money goes to wealthy owners and
agribusinesses

Markheim and Riedl 7 [Daniella, Jay Van Andel Senior Analyst in Trade, and Brian M. Riedl, Gover M.  Hermann Fellow 
in Economic Policy Studies at The Heritage Foundation, February 5th, “Farm Subsidies, Free Trade, and the Doha Round”, 
 http://www.heritage.org/RESEARCH/BUDGET/wm1337.cfm ] AVLB    

America's Incoherent Farm Policy

The way subsidies are targeted is arbitrary and irrational. Nearly 90 percent of all subsidies go to growers of just five crops
(wheat, cotton, corn, soybeans, and rice), while the vast majority of farmers specializing in livestock, fruits, vegetables, and
all other crops flourish in a free market without subsidies.

And it is not small family farms or cash-strapped farmers who get the bulk of subsidies, but big agribusinesses. Agriculture is
increasingly moving away from family farmers and is being consolidated into large, profitable agribusinesses. Consequently,
farm subsidies are no longer necessary to keep most farmers solvent. A Department of Agriculture report states that "on
average, farm households have higher incomes, greater wealth, and lower consumption expenditures than all U.S.
households."[5] The average farm household now earns $79,961, which is 26 percent above the national average. Farmers'
average net worth is double the national average. Farming is not a teetering industry; the farm failure rate is just one-sixth the
rate for non-farm businesses. Yet taxpayers subsidize (mostly large) farms with approximately $25 billion annually.

Furthermore, two-thirds of subsidies are distributed to the wealthiest 10 percent of farmers. In 1999, the 136,000 households
with annual farm sales of more than over $250,000—the group that also receives the largest farm subsidies—reported an
average income of $135,397, which was two-and-a-half times the national average.[6] Lawmakers, Fortune 500 companies,
and even celebrity hobby farmers such as Ted Turner, David Rockefeller, and Scottie Pippen collect subsides that dwarf what
the average family farmer receives.[7] Subsidizing large agribusinesses that grow certain crops while excluding many family
farmers who grow other crops has earned farm subsidies the title "America's largest corporate welfare program."[8]

In addition, U. S. farm subsidies embody an economic incoherence that is stunning even by government standards. Farm 
policy is based on the premise that surpluses have driven down crop prices and so farmers need subsidies to recover lost 
income. The federal government's remedy is to offer subsidies that increase as a farmer plants more crops. But planting more 
crops creates greater crop surpluses, further driving prices down and spurring demand for even greater subsidies. Then, while 
 paying some farmers to plant more crops, Washington turns around and pays other farmers  not     to farm 40 million acres of
    
 cropland each year. [9]
    Different farm policies simply cancel each other, with the only net effect being higher taxes on
    
Americans.
Subsidies Bad 30
ADI Peterson/Perry Lab
#1

A2: Small Farmers


Plan doesn't hurt small farmers-subsidies go to wealthy owners and farm incomes exceed national average

Edwards 7 [Chris, director of Tax Studies at CATO, “Agricultural Subsidies”, 6/13,


http://www.cato.org/downsizing/agriculture/agriculture_subsidies.html, AVLB]

1. Farm Subsidies Redistribute Wealth. Farm subsidies transfer the earnings of taxpayers to a small group of fairly well-off
farm businesses and landowners. USDA figures show that the average income of farm households has been consistently
higher than the average of all U.S. households. In 2005 the average income of farm households was $79,965, or 26 percent
higher than the $63,344 average for all households.19 When large-scale federal farm subsidies began in the 1930s, farm
incomes were only half the national average.

Although policymakers love to discuss the plight of the small farmer, the bulk of federal farm subsidies goes to the largest 
farms.20 For example, the largest 10 percent of recipients have received 72 percent of all subsidy payments in recent years.21 
Numerous large corporations and even some wealthy celebrities receive farm subsidies because they are the owners of 
farmland. It is landowners, not tenant farmers or farm workers, who benefit from subsidies. And one does not even have to be 
the owner of farmland to receive subsidies: Since 2000 the USDA has paid $1.3 billion in farm subsidies to people who own 
land that is no longer used for farming.22
Subsidies Bad 31
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#1

A2: Subsidies Key to Farms


Farm programs work against farmers­they encourage higher foreign tariffs and decrease demand

Griswold et al. 5 [Daniel, Stephen Slivinski, and Christopher Preble, scholars at the Cato Institute's Center for Trade Policy 
Studies, “Ripe for Reform: Six Good Reasons to Reduce U.S. Farm Subsidies and Trade Barriers”, 9/14, 
http://64.233.167.104/search?q=cache:z1gUW2FsluoJ:www.freetrade.org/pubs/pas/tpa­
030.pdf+Ripe+for+Reform:+Six+Good+Reasons+to+Reduce+U.S.+Farm+Subsidies+and+Trade+Barriers&hl=en&ct=clnk&
cd=2&gl=us&client=firefox­a, AVLB]

5. Larger Markets for U.S. Farmers and Economic Diversity for Rural America
Federal farm programs actually work against the interests of many farmers. Growers, especially the two­thirds
who don't receive subsidies, pay a heavy price through lost export opportunities from high trade barriers abroad.
Agriculture exporters face average foreign tariffs that are several times higher than the average tariffs on
manufactured products. The most promising opportunity to lower those barriers is the Doha Round, which won't
achieve a breakthrough until the rich countries stop trying to prop up their farms.

If global barriers to farm trade were removed, the World Bank estimates, worldwide farm exports would be 74
percent higher in 2015∙ than they would otherwise. American farmers would be among the biggest winners:
Comprehensive reform would mean an additional $88 billion in annual U.S. farm exports by 2015 and an additional
$28 billion in farm imports, for a net $60 billion surplus.
Protection has not served the long­term interests of even the most protected farm sectors. Barriers to commodity
imports discourage diversification of production into higher­value­added items and retard development of the food
processing industry. They discourage domestic consumption and encourage the use of lower­priced substitutes,
undermining the protected sectors' own domestic market share.
Artificially high prices for sugar, for example, have contributed to a long­term decline in domestic sugar
consumption. Today Americans consume about 40 percent less sugar per capita than they did when consumption
was at its peak in 1972. Domestic sugar has been replaced on the menu not by imports but by U.S.­made
substitutes such as high­fructose corn syrup and low­calorie sweeteners such as Splenda. Sugar's share of the
domestic sweetener market has been cut in half since 1967.
Experience shows that American farmers can thrive in free and open markets. American farmers profitably produce
lettuce, celery, cauliflower, potatoes, almonds, pistachios, apples, pears, cherries, melons, blueberries, grapes,
and hundreds of other specialty crops without guaranteed prices or protected markets. The impact of farm
subsidies on land prices makes growing these unprotected crops more expensive, and barriers caused by the
protection of other crops block exports.
The experience of New Zealand and Australia demonstrates that farmers can survive and thrive without significant
state support. Both of those countries enacted sweeping, unilateral reforms, including the elimination of import
barriers and domestic price support subsidies. As expected, some farms have gone out of business, but many
others have changed their operations to meet consumer demand. The result has been not a massive downsizing of
the agriculture sector but a surge of innovation, productivity, and output.
Subsidies Bad 32
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#1

A2: Reforms Solve


Current reforms don't solve-they retain the bloated subsidies of the 2002 bill

Markheim and Riedl 7 [Daniella, Jay Van Andel Senior Analyst in Trade, and Brian M. Riedl, Gover M.  Hermann Fellow 
in Economic Policy Studies at The Heritage Foundation, February 5th, “Farm Subsidies, Free Trade, and the Doha Round”, 
http://www.heritage.org/RESEARCH/BUDGET/wm1337.cf  AVLB]

In late January, the Department of Agriculture unveiled President Bush's proposal for reauthorizing the farm programs that
expire in September. These reforms would marginally improve the current system. The President would close a loophole that
currently allows excessive marketing loan payments. Counter-cyclical payments would be slightly altered to better target
low-revenue farmers. Best of all, the President would eliminate subsidies for farmers earning over $200,000 annually.

However, these tweaks generally retain the bloated and economically incoherent farm subsidy programs that in 2002 replaced
the innovative 1996 "freedom to farm" reforms. The watershed 1996 reforms largely ended market distortions, allowing
farmers to make production decisions without government interference. While farm subsidy costs have more than doubled in
the past decade, the President would spend only slightly less than the previous farm bill (and likely more than the
Congressional Budget Office baseline for these programs). Anti-free market milk and sugar policies would be only slightly
changed.

The President's proposal represents a small step in the right direction. Better still would be a return to "freedom to farm" 
policies. If these fail, the next test would be whether the President draws a line in the sand and threatens to veto the expensive 
and inefficient farm legislation Congress appears ready to write.
Subsidies Bad 33
ADI Peterson/Perry Lab
#1

A2: Kills Farms
U.S. farms would survive absent subsidies-farmers have diversified and New Zealand proves

Edwards 7 [Chris, director of Tax Studies at CATO, “Agricultural Subsidies”, 6/13,


http://www.cato.org/downsizing/agriculture/agriculture_subsidies.html, AVLB]

6. Agriculture Would Thrive without Subsidies. It is normal for people to fear economic change, but many industries have
been radically reformed in recent decades with positive results, including the airline, trucking, telecommunications, and
energy industries. If U.S. farm subsidies were ended, and agriculture markets decontrolled and open to entrepreneurs,
farming would change—different crops would be planted, land usage would change, and some farms would go bankrupt.
But it is very likely that a stronger and more innovative industry would emerge that had greater resilience to shocks
and downturns.

Interestingly, producers of most U.S. agricultural commodities do not receive regular subsidies from the federal government.
In fact, commodities that are eligible for federal subsidies account for 36 percent of U.S. farm production, while commodities
that generally survive without subsidies, including meats, poultry, fruits, and vegetables, account for 64 percent of
production.33 And, of course, nearly all other U.S. industries prosper without the government coddling that many farmers
receive, and many are subject to wide swings in market conditions as is agriculture.

Another point to consider is that farm households are much more diversified today and better able to deal with market
fluctuations. Many farm households these days earn the bulk of their income from nonfarm sources, which creates financial
stability. USDA figures show that only 38 percent of farm households consider farming their primary occupation, and even a
majority of income for those households comes from nonfarm sources.34

Some USDA programs provide useful commercial services such as insurance. The USDA says that its insurance services are
"market-based," but if that were true, there would be no need for subsidies and the services ought to be privatized. After all,
most U.S. industries pay for their own commercial services. Wall Street offers a huge array of financial tools, such as hedging
and forward contracting, that can help farmers weather cycles in market prices without government subsidies.

An interesting example of farmers prospering without subsidies is New Zealand.35 In 1984 New Zealand ended its farm
subsidies, which was a bold stroke because the country is four times more dependent on farming than is the United States.
The changes were initially met with fierce resistance, but New Zealand farm productivity, profitability, and output have
soared since the reforms.36 New Zealand farmers have cut costs, diversified land use, sought nonfarm income, and
developed niche markets such as kiwi fruit.

Today, data from the Organization for Economic Cooperation and Development show that farm subsidies in New Zealand 
represent just 3 percent of farm income, which compares to 18 percent in the United States.37 New Zealand's main farm 
organization argues that the nation's experience "thoroughly debunked the myth that the farming sector cannot prosper 
 without government subsidies."  38  That myth needs to be debunked in the United States as well
   .