Well, they didn't actually acknowledge that they had been wrong, but the NYT today complained that high food prices (partly the result of biofuel subsidies) are having a devastating impact on the developing world. The NYT used to run editorials on a regular basis that complained that farm subsidies "harvest poverty" in the developing world.
Okay, here's the problem. Subsides lower prices. Let's say that again (I know it seems simple, but many highly credentialed people get it wrong), subsidies lower prices. The farm subsidies that the NYT harshly condemns lead to lower worldwide food prices.
The NYT can complain about high food prices leading to hunger for people who can't afford food. It can also complain about low food prices stifling agricultural development in poor countries. But, it cannot complain about both high and low food prices and expect anyone to take its views seriously.
The reality is that rich country agricultural subsidies have a mixed impact on the developing world. Their elimination would benefit producers and provide a net benefit to some countries, but this would not be the boon the NYT, along with the World Bank and some NGOs, implied. It would be a great step forward if this issue could be discussed more seriously in the future.
Thursday, April 10, 2008
Dean Baker on farm subsidies...
The NYT Takes Back Its Harsh Criticism of Farm Subsidies
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This comment is good in that it speaks about the problem of low farm prices, and compares it to recent talk about higher farm prices. It's weak, however, in that, in fact, both are truly problems, as the decades of low farm prices (bigger and bigger reductions since 1953, and especially below full costs 198`1-2006), caused so much poverty that people now can't even afford export dumping prices. It should be noted that Least Developed Countries are 70% rural. Also false is the claim that farm subsidies cause the cheap prices. Economically the cause is the lack of price responsiveness in free markets for farm commodities. This was fixed with nonsubsidy programs of the New Deal, with fair trade price floors supply reduction programs (and ceilings with reserve supplies for occasional price spikes). See my video, "Michael Pollan Rebuttal for 4 proofs showing that subsidies aren't what cause the low prices (inelasticity data, historical, other countries, major econometric studies of subsidies). For documentation click my name. We need the Food from Family Farms Act of the National Family Farm Coalition, which directly addresses both topside and bottom side farm/food justice issues.
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