Food Price and Trade Policy Biases - The Oxford Topic of Food, Politics, and Society - page 360

Chapter 14
Food Price and Trade
Policy Biases
Inefficient, Inequitable, Yet Not Inevitable
Kym Anderson
Introduction
Farm subsidies have been prevalent on both sides of the North Atlantic for decades.
Despite their high budgetary cost, society seems willing to tolerate them. Some think
of it as justice for those left behind in rural areas by modern urban-based economic
growth. Others (most notably in France) see it as a way of preserving the quaint peas-
ant lifestyle they or their forebears left when they moved to the city. It is also argued that
such policies help farmers preserve the natural environment in rural areas, provide food
security for the nation, and (in countries such as Norway) help to populate and retain
social vitality in remote areas.
Laudable though these societal objectives may be, they could be achieved far more
effectively and efficiently by direct measures than by farm subsidies. This has been
demonstrated by many economists (including this one, see Anderson 2000), so the
arguments won't be repeated here. Instead, this article seeks to show that farm subsi-
dies are just the tip of a huge iceberg of governmental distortions to food markets in
high-income countries. These distortions are predominantly the result of trade policies
that, even more than direct subsidies, are not only ineffective and inefficient but are also
adding to global inequality and poverty.
Moreover, these policies of high-income countries are only half the problem. The
other half comes from governmental distortions to markets for food and other farm
products in developing countries. For many decades the latter policies have taxed rather
than supported farmers, but an anti-agricultural policy bias can be just as inefficient and
inequitable as a pro-farmer policy bias.