U.S. farmers rank low on global subsidy scale

Compared to other major agricultural producers-both developed and developing countries-America ranks near the bottom of the subsidization and tariff scale, according to a global subsidy handbook compiled in April by Texas Tech University.

Conducted by researchers at the university's Cotton Economics Research Institute (CERI), "the study highlights the often overlooked fact that all countries, regardless of size, protect their agricultural producers-and generally do so far more than we do in the United States," explained CERI director Dr. Darren Hudson.

"Our research shows that the U.S. falls near the bottom of the heap in terms of the use of tariffs and in a similar position relative to domestic support," he continued. "Unfortunately, because the World Trade Organization (WTO) recognizes some subsidies and not others in their calculations, WTO Doha Round negotiations could make the playing field more lopsided, putting the U.S. farm sector at an even greater disadvantage."

Texas Tech's study contains a country-by-country and commodity-by-commodity breakdown of foreign agricultural subsidies and tariffs.

These profiles show that some of America's biggest competitors in the developing world have much higher tariff protection, while fellow developed nations like the European Union and Japan outpace the U.S. in producer income supports.

The study also exposes how many countries use forms of support that are not measured by the WTO or subject to WTO rules, but are no less advantageous to foreign producers.

Subsidies to cover input costs, for example, are a favorite among countries like Brazil, China, India and Thailand, which have sophisticated farming industries but still classify themselves as "developing." By doing so, they are able to avoid having to make reforms in the WTO.

"As WTO discussions and bilateral trade talks continue, it is of vital importance that the general public and U.S. trade negotiators have a clearer understanding of the world's farm policies," Hudson concluded. "Hopefully, this study will be a useful tool to help enlighten the debate."

Download the Foreign Ag Subsidy Handbook.

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