US farm subsidies do more harm than good in the international marketplace. Agricultural trade is distorted by both import barriers and production and export subsidies. Smaller, more developing countries suffer in the market because of the Development experts agree and say the effects ripple throughout developing economies. American farm exports drive down prices paid to local farmers, and in turn, reduce rural income around the world and push farmers off the land and into different markets. This paper will cover the current issue of national protectionism and its faults in the global market, and the reasoning and history of government farm subsidies in the first place.

It has been more than 5 months after President Bush signed the new $180 billion farm bill. Agriculture has leaped from the diplomatic background to near the top of the list of international complaints against the United States. Portrayed by Bush and its supporters as a necessary safety precaution for farmers and by those against it as an election-year welfare program to win Midwestern votes, the huge increase in subsidies has become an international crisis. Europe's foreign policy ch

Farm subsidies are designed to prevent the extinction of the small farmer. Despite the social benefits, subsidies have many problems. The subsidy system is often wasteful; the government finances irrigation systems in the California Imperial Valley, and then pays farmers not to grow crops on it. Some benefits favor the larger farms and hurt the small farmer. Marketing orders and tax breaks hurt small operators by giving more money to bigger farms. Big farms can then overproduce and undersell using advanced machinery, driving lesser farms out of business.

ief, Javier Solana, declared that the new American agriculture policy has created the "most profound" division between Europe and the United States, worse than disputes over steel tariffs, the Kyoto environmental treaty or the international criminal court. In Rome, at a United Nations conference on hunger, developing countries pointed this week to the huge new subsidies to American farmers as one of the biggest obstacles to creating vital opportunities for their own farmers and enabling them to climb out of poverty (Becker, NY Times).

As for the food and grain industries, lowering import duties and tariffs would bring in less expensive foods and grains. This would improve greatly the democracy between the United States and many other trading nations. It would promote growth in lesser developing countries and maintain strong economical and social ties. This would allow the Unites States to gain comparative advantage in other areas and improve the social welfare of the nation. A nation gains from trade by exporting the goods in which it can produce more efficiently and importing those in which it produces least efficiently. It makes almost perfect sense, until bureaucracy comes into play. Politics and national sovereignty is a great concern for many leaders of many countries. No one wants to depend on another for anything. But it is the key to stable economies and a stable world.

Congress, to counter this, passed price support legislation to assure a profit to the farmers. The Soil Conservation and Domestic Allotment Act of 1936 allowed the government to limit acreage use for certain soil-depleting crops. The Agricultural Marketing Agreement Act of 1937 allowed the government to set the minimum price and amount sold of a good at the market. The Agricultural Adjustment Act of 1938, farmers were given price supports for not growing crops. These allowed farmers to mechanize, which was necessary because of the scarcity of farm labor during World War II. During World War II, demand for food increased, and farmers enjoyed a period of general prosperity. In 1965, the government reduced surplus by getting farmers to set aside land for soil conservation (Blanpied 121). The Agricultural Act of 1970 gave direct payments to farmers to set aside some of their land (Patterson 129). The 1973 farm bill lowered aid to farmers by lowering the target income for price supports. The 1970s were good years for farmers. Wheat and corn prices tripled, land prices doubled, and farm exports outstripped imports by twenty-four billion dollars. Under the Carter administration, farm support was minimized. Competition from foreign markets, like Argentina, lowered prices and incomes (Long 88). Ronald Reagan wanted to wean the farm community from government support. Later on in his administration, though, he started the Payments

Some topics in this essay:
Associated Press, Ronald Reagan, Grapes Wrath, President Bush, Imperial Valley, European Union, GLOBAL MARKET, Agricultural Act, John Steinbeck, Critics American, farm subsidies, farms business, european union, developing countries, foreign markets, american farm, american farmers, larger farms, farm bill, economic system, set aside land, inefficient dysfunctional economic, preserve family farm, benefits farm subsidies, farmers set aside,