Thursday, February 28, 2008

Farm Subsidies, why do we have them?

A world bank study in 2002 concluded that trade distortions in agriculture cost the global economy about 587 billion U.S. dollars every year. That's around $100 a person, or about 1.9% of world GDP. It doesn't sound like a lot, and it's not. Equivalent to getting one years worth of economic growth for free.

The story changes when you figure out who is getting, and who is losing. Western farmers would lose, but every nation would benefit as a whole. Poor nations would benefit the most, and when you're talking about poor nations, $100 a person goes a very long way.

1 comment:

Anonymous said...

um... don't you think it might depend on whether poor nations are importing or exporting the subsidized goods?