Agricultural policy
Encyclopedia
Agricultural policy describes a set of laws relating to domestic agriculture
Agriculture
Agriculture is the cultivation of animals, plants, fungi and other life forms for food, fiber, and other products used to sustain life. Agriculture was the key implement in the rise of sedentary human civilization, whereby farming of domesticated species created food surpluses that nurtured the...

 and imports of foreign agricultural products. Governments usually implement agricultural policies with the goal of achieving a specific outcome in the domestic agricultural product markets. Outcomes can involve, for example, a guaranteed supply level, price stability, product quality, product selection, land use or employment.

Agriculture policy concerns

An example of the breadth and types of agriculture policy concerns can be found in the Australian Bureau of Agricultural and Resource Economics article Agricultural Economies of Australia and New Zealand which says that the major challenges and issues faced by their industrial agriculture
Industrial agriculture
Industrial farming is a form of modern farming that refers to the industrialized production of livestock, poultry, fish, and crops. The methods of industrial agriculture are technoscientific, economic, and political...

 industry are:
  • marketing challenges and consumer tastes
  • international trading environment (world market conditions, barriers to trade, quarantine and technical barriers, maintenance of global competitiveness and market image, and management of biosecurity issues affecting imports and the disease status of exports)
  • biosecurity (pests and diseases such as bovine spongiform encephalopathy
    Bovine spongiform encephalopathy
    Bovine spongiform encephalopathy , commonly known as mad-cow disease, is a fatal neurodegenerative disease in cattle that causes a spongy degeneration in the brain and spinal cord. BSE has a long incubation period, about 30 months to 8 years, usually affecting adult cattle at a peak age onset of...

     (BSE), avian influenza, foot and mouth disease, citrus canker
    Citrus canker
    Citrus canker is a disease affecting citrus species that is caused by the bacterium Xanthomonas axonopodis. Infection causes lesions on the leaves, stems, and fruit of citrus trees, including lime, oranges, and grapefruit...

    , and sugarcane smut
    Sugarcane smut
    Sugarcane smut is a fungal disease of sugarcane caused by the fungus Sporisorium scitamineum. It is sometimes known as culmicolous, which describes the outgrowth of fungus of the stalk of the cane. It attacks several sugarcane species and has been reported to occur on a few other grass species as...

    )
  • infrastructure (such as transport, ports, telecommunications, energy and irrigation facilities)
  • management skills and labor supply (With increasing requirements for business planning, enhanced market awareness, the use of modern technology such as computers and global positioning systems and better agronomic management, modern farm managers will need to become increasingly skilled. Examples: training of skilled workers, the development of labor hire systems that provide continuity of work in industries with strong seasonal peaks, modern communication tools, investigating market opportunities, researching customer requirements, business planning including financial management, researching the latest farming techniques, risk management skills)
  • coordination (a more consistent national strategic agenda for agricultural research and development; more active involvement of research investors in collaboration with research providers developing programs of work; greater coordination of research activities across industries, research organisations and issues; and investment in human capital to ensure a skilled pool of research personnel in the future.)
  • technology (research, adoption, productivity, genetically modified (GM) crops, investments)
  • water (access rights, water trade, providing water for environmental outcomes, assignment of risk in response to reallocation of water from consumptive to environmental use, accounting for the sourcing and allocation of water)
  • resource access issues (management of native vegetation, the protection and enhancement of biodiversity, sustainability of productive agricultural resources, landholder responsibilities)

Poverty reduction

Agriculture remains the largest single contributor to the livelihoods of the 75% of the world's poor who live in rural areas. Encouraging agricultural growth is therefore an important aspect of agricultural policy in the developing world. In addition, a recent Natural Resource Perspective paper by the Overseas Development Institute
Overseas Development Institute
The Overseas Development Institute is one of the leading independent think tanks on international development and humanitarian issues. Based in London, its mission is "to inspire and inform policy and practice which lead to the reduction of poverty, the alleviation of suffering and the achievement...

 found that good infrastructure
Infrastructure
Infrastructure is basic physical and organizational structures needed for the operation of a society or enterprise, or the services and facilities necessary for an economy to function...

, education
Education
Education in its broadest, general sense is the means through which the aims and habits of a group of people lives on from one generation to the next. Generally, it occurs through any experience that has a formative effect on the way one thinks, feels, or acts...

 and effective information services in rural areas were necessary to improve the chances of making agriculture work for the poor.

Biosecurity

The biosecurity concerns facing industrial agriculture can be illustrated by:
  • the threat to poultry and humans from H5N1
    H5N1
    Influenza A virus subtype H5N1, also known as "bird flu", A or simply H5N1, is a subtype of the influenza A virus which can cause illness in humans and many other animal species...

    ; possibly caused by use of animal vaccines
  • the threat to cattle and humans from bovine spongiform encephalopathy (BSE); possibly caused by the unnatural feeding of cattle to cattle to minimize costs
  • and the threat to industry profits from diseases like foot-and-mouth disease and citrus canker which increasing globalization makes harder to contain.

Avian influenza

Use of animal vaccines can create new viruses that kill people and cause flu pandemic threats. H5N1
H5N1
Influenza A virus subtype H5N1, also known as "bird flu", A or simply H5N1, is a subtype of the influenza A virus which can cause illness in humans and many other animal species...

 is an example of where this might have already occurred. According to the CDC
Centers for Disease Control and Prevention
The Centers for Disease Control and Prevention are a United States federal agency under the Department of Health and Human Services headquartered in Druid Hills, unincorporated DeKalb County, Georgia, in Greater Atlanta...

 article H5N1 Outbreaks and Enzootic Influenza by Robert G. Webster et al.:"Transmission of highly pathogenic H5N1 from domestic poultry back to migratory waterfowl in western China has increased the geographic spread. The spread of H5N1 and its likely reintroduction to domestic poultry increase the need for good agricultural vaccines. In fact, the root cause of the continuing H5N1 pandemic threat may be the way the pathogenicity of H5N1 viruses is masked by co-circulating influenza viruses or bad agricultural vaccines." Dr. Robert Webster explains: "If you use a good vaccine you can prevent the transmission within poultry and to humans. But if they have been using vaccines now [in China] for several years, why is there so much bird flu? There is bad vaccine that stops the disease in the bird but the bird goes on pooping out virus and maintaining it and changing it. And I think this is what is going on in China. It has to be. Either there is not enough vaccine being used or there is substandard vaccine being used. Probably both. It’s not just China. We can’t blame China for substandard vaccines. I think there are substandard vaccines for influenza in poultry all over the world."

In response to the same concerns, Reuters reports Hong Kong infectious disease expert Lo Wing-lok indicating that vaccines have to take top priority. Julie Hall, who is in charge of the WHO's outbreak response in China, claimed that China's vaccinations might be masking the virus. The BBC reported that Dr Wendy Barclay, a virologist at the University of Reading, UK said: "The Chinese have made a vaccine based on reverse genetics made with H5N1 antigens, and they have been using it. There has been a lot of criticism of what they have done, because they have protected their chickens against death from this virus but the chickens still get infected; and then you get drift - the virus mutates in response to the antibodies - and now we have a situation where we have five or six 'flavours' of H5N1 out there."

Bovine spongiform encephalopathy

Bovine spongiform encephalopathy (BSE), commonly known as "mad cow disease", is a fatal, neurodegenerative disease of cattle
Cattle
Cattle are the most common type of large domesticated ungulates. They are a prominent modern member of the subfamily Bovinae, are the most widespread species of the genus Bos, and are most commonly classified collectively as Bos primigenius...

, which infects by a mechanism that surprised biologists upon its discovery in the late 20th century. In the UK, the country worst affected, 179,000 cattle were infected and 4.4 million killed as a precaution. The disease can be transmitted to human beings who eat or inhale material from infected carcasses. In humans, it is known as new variant Creutzfeldt-Jakob disease
Creutzfeldt-Jakob disease
Creutzfeldt–Jakob disease or CJD is a degenerative neurological disorder that is incurable and invariably fatal. CJD is at times called a human form of mad cow disease, given that bovine spongiform encephalopathy is believed to be the cause of variant Creutzfeldt–Jakob disease in humans.CJD...

 (vCJD or nvCJD), and by June 2007, it had killed 165 people in Britain, and six elsewhere with the number expected to rise because of the disease's long incubation period. Between 460,000 and 482,000 BSE-infected animals had entered the human food chain before controls on high-risk offal
Offal
Offal , also called, especially in the United States, variety meats or organ meats, refers to the internal organs and entrails of a butchered animal. The word does not refer to a particular list of edible organs, which varies by culture and region, but includes most internal organs other than...

 were introduced in 1989.

A British inquiry into BSE concluded that the epidemic was caused by feeding cattle, who are normally herbivore
Herbivore
Herbivores are organisms that are anatomically and physiologically adapted to eat plant-based foods. Herbivory is a form of consumption in which an organism principally eats autotrophs such as plants, algae and photosynthesizing bacteria. More generally, organisms that feed on autotrophs in...

s, the remains of other cattle in the form of meat and bone meal (MBM), which caused the infectious agent to spread. The origin of the disease itself remains unknown. The current scientific view is that infectious proteins called prion
Prion
A prion is an infectious agent composed of protein in a misfolded form. This is in contrast to all other known infectious agents which must contain nucleic acids . The word prion, coined in 1982 by Stanley B. Prusiner, is a portmanteau derived from the words protein and infection...

s developed through spontaneous mutation, probably in the 1970s, and there is a possibility that the use of organophosphorus pesticides
Organophosphate
An organophosphate is the general name for esters of phosphoric acid. Phosphates are probably the most pervasive organophosphorus compounds. Many of the most important biochemicals are organophosphates, including DNA and RNA as well as many cofactors that are essential for life...

 increased the susceptibility of cattle to the disease. The infectious agent is distinctive for the high temperatures it is able to survive; this contributed to the spread of the disease in Britain, which had reduced the temperatures used during its rendering process. Another contributory factor was the feeding of infected protein supplements to very young calves instead of milk from their mothers.

Foot-and-mouth disease

Foot-and-mouth disease is a highly contagious
Infectious disease
Infectious diseases, also known as communicable diseases, contagious diseases or transmissible diseases comprise clinically evident illness resulting from the infection, presence and growth of pathogenic biological agents in an individual host organism...

 and sometimes fatal viral disease
Disease
A disease is an abnormal condition affecting the body of an organism. It is often construed to be a medical condition associated with specific symptoms and signs. It may be caused by external factors, such as infectious disease, or it may be caused by internal dysfunctions, such as autoimmune...

 of cattle
Cattle
Cattle are the most common type of large domesticated ungulates. They are a prominent modern member of the subfamily Bovinae, are the most widespread species of the genus Bos, and are most commonly classified collectively as Bos primigenius...

 and pig
Pig
A pig is any of the animals in the genus Sus, within the Suidae family of even-toed ungulates. Pigs include the domestic pig, its ancestor the wild boar, and several other wild relatives...

s. It can also infect deer
Deer
Deer are the ruminant mammals forming the family Cervidae. Species in the Cervidae family include white-tailed deer, elk, moose, red deer, reindeer, fallow deer, roe deer and chital. Male deer of all species and female reindeer grow and shed new antlers each year...

, goat
Goat
The domestic goat is a subspecies of goat domesticated from the wild goat of southwest Asia and Eastern Europe. The goat is a member of the Bovidae family and is closely related to the sheep as both are in the goat-antelope subfamily Caprinae. There are over three hundred distinct breeds of...

s, sheep
Domestic sheep
Sheep are quadrupedal, ruminant mammals typically kept as livestock. Like all ruminants, sheep are members of the order Artiodactyla, the even-toed ungulates. Although the name "sheep" applies to many species in the genus Ovis, in everyday usage it almost always refers to Ovis aries...

, and other bovid
Bovid
A bovid is any of almost 140 species of cloven-hoofed ruminant mammal at least the males of which bear characteristic unbranching horns covered in a permanent sheath of keratin....

s with cloven hooves, as well as elephant
Elephant
Elephants are large land mammals in two extant genera of the family Elephantidae: Elephas and Loxodonta, with the third genus Mammuthus extinct...

s, rat
Rat
Rats are various medium-sized, long-tailed rodents of the superfamily Muroidea. "True rats" are members of the genus Rattus, the most important of which to humans are the black rat, Rattus rattus, and the brown rat, Rattus norvegicus...

s, and hedgehog
Hedgehog
A hedgehog is any of the spiny mammals of the subfamily Erinaceinae and the order Erinaceomorpha. There are 17 species of hedgehog in five genera, found through parts of Europe, Asia, Africa, and New Zealand . There are no hedgehogs native to Australia, and no living species native to the Americas...

s. Humans are affected only very rarely. FMD occurs throughout much of the world, and while some countries have been free of FMD for some time, its wide host range and rapid spread represent cause for international concern. In 1996, endemic areas included Asia
Asia
Asia is the world's largest and most populous continent, located primarily in the eastern and northern hemispheres. It covers 8.7% of the Earth's total surface area and with approximately 3.879 billion people, it hosts 60% of the world's current human population...

, Africa
Africa
Africa is the world's second largest and second most populous continent, after Asia. At about 30.2 million km² including adjacent islands, it covers 6% of the Earth's total surface area and 20.4% of the total land area...

, and parts of South America
South America
South America is a continent situated in the Western Hemisphere, mostly in the Southern Hemisphere, with a relatively small portion in the Northern Hemisphere. The continent is also considered a subcontinent of the Americas. It is bordered on the west by the Pacific Ocean and on the north and east...

. North America
North America
North America is a continent wholly within the Northern Hemisphere and almost wholly within the Western Hemisphere. It is also considered a northern subcontinent of the Americas...

, Australia
Australia
Australia , officially the Commonwealth of Australia, is a country in the Southern Hemisphere comprising the mainland of the Australian continent, the island of Tasmania, and numerous smaller islands in the Indian and Pacific Oceans. It is the world's sixth-largest country by total area...

, New Zealand
New Zealand
New Zealand is an island country in the south-western Pacific Ocean comprising two main landmasses and numerous smaller islands. The country is situated some east of Australia across the Tasman Sea, and roughly south of the Pacific island nations of New Caledonia, Fiji, and Tonga...

 and Japan
Japan
Japan is an island nation in East Asia. Located in the Pacific Ocean, it lies to the east of the Sea of Japan, China, North Korea, South Korea and Russia, stretching from the Sea of Okhotsk in the north to the East China Sea and Taiwan in the south...

 have been free of FMD for many years. Most Europe
Europe
Europe is, by convention, one of the world's seven continents. Comprising the westernmost peninsula of Eurasia, Europe is generally 'divided' from Asia to its east by the watershed divides of the Ural and Caucasus Mountains, the Ural River, the Caspian and Black Seas, and the waterways connecting...

an countries have been recognized as free, and countries belonging to the European Union
European Union
The European Union is an economic and political union of 27 independent member states which are located primarily in Europe. The EU traces its origins from the European Coal and Steel Community and the European Economic Community , formed by six countries in 1958...

 have stopped FMD vaccination
Vaccination
Vaccination is the administration of antigenic material to stimulate the immune system of an individual to develop adaptive immunity to a disease. Vaccines can prevent or ameliorate the effects of infection by many pathogens...

.

Infection with foot-and-mouth disease tends to occur locally, that is, the virus is passed on to susceptible animals through direct contact with infected animals or with contaminated pens or vehicles used to transport livestock. The clothes and skin of animal handlers such as farmers, standing water, and uncooked food scraps and feed supplements containing infected animal products can harbor the virus as well. Cows can also catch FMD from the semen of infected bulls. Control measures include quarantine and destruction of infected livestock, and export bans for meat and other animal products to countries not infected with the disease.

Because FMD rarely infects humans but spreads rapidly among animals, it is a much greater threat to the agriculture industry than to human health. Farmers around the world can lose huge amounts of money during a foot-and-mouth epidemic, when large numbers of animals are destroyed and revenues from milk and meat production go down. One of the difficulties in vaccinating against FMD is the huge variation between and even within serotypes. There is no cross-protection between serotype
Serotype
Serotype or serovar refers to distinct variations within a subspecies of bacteria or viruses. These microorganisms, viruses, or cells are classified together based on their cell surface antigens...

s (meaning that a vaccine for one serotype won't protect against any others) and in addition, two strains
Strain (biology)
In biology, a strain is a low-level taxonomic rank used in three related ways.-Microbiology and virology:A strain is a genetic variant or subtype of a micro-organism . For example, a "flu strain" is a certain biological form of the influenza or "flu" virus...

 within a given serotype may have nucleotide
DNA
Deoxyribonucleic acid is a nucleic acid that contains the genetic instructions used in the development and functioning of all known living organisms . The DNA segments that carry this genetic information are called genes, but other DNA sequences have structural purposes, or are involved in...

 sequences that differ by as much as 30% for a given gene. This means that FMD vaccine
Vaccine
A vaccine is a biological preparation that improves immunity to a particular disease. A vaccine typically contains an agent that resembles a disease-causing microorganism, and is often made from weakened or killed forms of the microbe or its toxins...

s must be highly specific to the strain involved. Vaccination only provides temporary immunity
Immune system
An immune system is a system of biological structures and processes within an organism that protects against disease by identifying and killing pathogens and tumor cells. It detects a wide variety of agents, from viruses to parasitic worms, and needs to distinguish them from the organism's own...

 that lasts from months to years.

Citrus canker

Citrus canker is a disease affecting citrus
Citrus
Citrus is a common term and genus of flowering plants in the rue family, Rutaceae. Citrus is believed to have originated in the part of Southeast Asia bordered by Northeastern India, Myanmar and the Yunnan province of China...

 species that is caused by the bacterium Xanthomonas axonopodis. Infection causes lesions on the leaves, stems, and fruit
Fruit
In broad terms, a fruit is a structure of a plant that contains its seeds.The term has different meanings dependent on context. In non-technical usage, such as food preparation, fruit normally means the fleshy seed-associated structures of certain plants that are sweet and edible in the raw state,...

 of citrus trees, including lime, oranges, and grapefruit. While not harmful to humans, canker significantly affects the vitality of citrus trees, causing leaves and fruit to drop prematurely; a fruit infected with canker is safe to eat but too unsightly to be sold. The disease, which is believed to have originated in South East Asia, is extremely persistent when it becomes established in an area, making it necessary for all citrus orchards to be destroyed for successful eradication of the disease. Australia
Australia
Australia , officially the Commonwealth of Australia, is a country in the Southern Hemisphere comprising the mainland of the Australian continent, the island of Tasmania, and numerous smaller islands in the Indian and Pacific Oceans. It is the world's sixth-largest country by total area...

, Brazil
Brazil
Brazil , officially the Federative Republic of Brazil , is the largest country in South America. It is the world's fifth largest country, both by geographical area and by population with over 192 million people...

 and the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...

 are currently suffering from canker outbreaks.

The disease can be detected in orchard
Orchard
An orchard is an intentional planting of trees or shrubs that is maintained for food production. Orchards comprise fruit or nut-producing trees which are grown for commercial production. Orchards are also sometimes a feature of large gardens, where they serve an aesthetic as well as a productive...

s and on fruit by the appearance of lesions. Early detection is critical in quarantine situations. Bacteria are tested for pathogenicity by inoculating multiple citrus species with the bacterium. Simultaneously, other diagnostic tests (antibody detection, fatty-acid profiling, and genetic procedures using PCR) are conducted to identify the particular canker strain. Citrus canker outbreaks are prevented and managed in a number of ways. In countries that do not have canker, the disease is prevented from entering the country by quarantine measures. In countries with new outbreaks, eradication programs that are started soon after the disease has been discovered have been successful; such programs rely on destruction of affected orchards. When eradication has been unsuccessful and the disease has become established, management options include replacing susceptible citrus cultivars with resistant cultivars, applying preventive sprays of copper
Copper
Copper is a chemical element with the symbol Cu and atomic number 29. It is a ductile metal with very high thermal and electrical conductivity. Pure copper is soft and malleable; an exposed surface has a reddish-orange tarnish...

-based bactericides, and destroying infected trees and all surrounding trees within an appropriate radius.

The citrus industry is the largest fresh-fruit exporting industry in Australia. Australia has had three outbreaks of citrus canker; two were successfully eradicated and one is ongoing. The disease was found twice during the 1900s in the Northern Territory
Northern Territory
The Northern Territory is a federal territory of Australia, occupying much of the centre of the mainland continent, as well as the central northern regions...

 and was eradicated each time. During the first outbreak in 1912, every citrus tree north of latitude 19° south
19th parallel south
The 19th parallel south is a circle of latitude that is 19 degrees south of the Earth's equatorial plane. It crosses the Atlantic Ocean, Africa, the Indian Ocean, Australasia, the Pacific Ocean and South America....

 was destroyed, taking 11 years to eradicate the disease. In 2004, Asiatic citrus canker was detected in an orchard in Emerald
Emerald, Queensland
Emerald is a town located in the Central Highlands district of Central Queensland, Australia. At the 2006 census, Emerald had a population of 10,999. The town is the business centre for the Central Highlands Regional Council....

, Queensland
Queensland
Queensland is a state of Australia, occupying the north-eastern section of the mainland continent. It is bordered by the Northern Territory, South Australia and New South Wales to the west, south-west and south respectively. To the east, Queensland is bordered by the Coral Sea and Pacific Ocean...

, and was thought to have occurred from the illegal import of infected citrus plants. The state and federal governments have ordered that all commercial orchards, all non-commercial citrus tress, and all native lime trees (C. glauca) in the vicinity of Emerald be destroyed rather than trying to isolate infected trees.

Policy tools

An agricultural subsidy
Agricultural subsidy
An agricultural subsidy is a governmental subsidy paid to farmers and agribusinesses to supplement their income, manage the supply of agricultural commodities, and influence the cost and supply of such commodities...

 is a governmental subsidy paid to farmers and agribusinesses to manage the agricultural industry as one part of the various methods a government uses in a mixed economy
Mixed economy
Mixed economy is an economic system in which both the state and private sector direct the economy, reflecting characteristics of both market economies and planned economies. Most mixed economies can be described as market economies with strong regulatory oversight, in addition to having a variety...

. The conditions for payment and the reasons for the individual specific subsidies varies with farm product, size of farm, nature of ownership, and country among other factors. Enriching peanut farmers for political purposes, keeping the price of a staple low to keep the poor from rebelling, stabilizing the production of a crop to avoid famine years, encouraging diversification
Agricultural diversification
In the agricultural context, diversification can be regarded as the re-allocation of some of a farm's productive resources, such as land, capital, farm equipment and paid labour, into new activities...

 and many other purposes have been suggested as the reason for specific subsidies.

Price floor
Price floor
A price floor is a government- or group-imposed limit on how low a price can be charged for a product. For a price floor to be effective, it must be greater than the equilibrium price.-Effectiveness of price floors:...

s or price ceiling
Price ceiling
A price ceiling is a government-imposed limit on the price charged for a product. Governments intend price ceilings to protect consumers from conditions that could make necessary commodities unattainable. However, a price ceiling can cause problems if imposed for a long period without controlled...

s set a minimum or maximum price for a product. Price controls
Price controls
Price controls are governmental impositions on the prices charged for goods and services in a market, usually intended to maintain the affordability of staple foods and goods, and to prevent price gouging during shortages, or, alternatively, to insure an income for providers of certain goods...

 encourage more production by a price floor or less production by a price ceiling.
A government can erect trade barriers to limit the quantity of goods imported (in the case of a Quota Share) or enact tariffs to raise the domestic price of imported products. These barriers give preference to domestic producers.

National security

Some argue that nations have an interest in assuring there is sufficient domestic production capability to meet domestic needs in the event of a global supply disruption. Significant dependence on foreign food producers makes a country strategically vulnerable in the event of war, blockade or embargo. Maintaining adequate domestic capability allows for food self-sufficiency that lessens the risk of supply shocks due to geopolitical events. Agricultural policies may be used to support domestic producers as they gain domestic and international market share. This may be a short term way of encouraging an industry until it is large enough to thrive without aid. Or it may be an ongoing subsidy designed to allow a product to compete with or undercut foreign competition. This may produce a net gain for a government despite the cost of interventions because it allows a country to build up an export industry or reduce imports. It also helps to form the nations supply and demand market.

Environmental Protection and Land Management

Farm or undeveloped land composes the majority of land in most countries. Policies may encourage some land uses rather than others in the interest of protecting the environment. For instance, subsidies may be given for particular farming methods, forestation, land clearance, or pollution abatement.

Rural poverty and poverty relief

Subsidising farming may encourage people to remain on the land and obtain some income. This might be relevant to a third world country with many peasant farmers, but it may also be a consideration to more developed countries such as Poland. They have a very high unemployment rate, much farmland and retain a large rural population growing food for their own use.
Price controls may also be used to assist poor citizens. Many countries have used this method of welfare support as it delivers cheap food to the poorest without the need to assess people to give them financial aid.

Organic farming assistance

Welfare economics
Welfare economics
Welfare economics is a branch of economics that uses microeconomic techniques to evaluate economic well-being, especially relative to competitive general equilibrium within an economy as to economic efficiency and the resulting income distribution associated with it...

 theory holds that sometimes private activities can impose social cost
Social cost
Social cost, in economics, is generally defined in opposition to "private cost". In economics, theorists model individual decision-making as measurement of costs and benefits...

s upon others. Industrial agriculture
Industrial agriculture
Industrial farming is a form of modern farming that refers to the industrialized production of livestock, poultry, fish, and crops. The methods of industrial agriculture are technoscientific, economic, and political...

 is widely considered to impose social costs through pesticide
Pesticide
Pesticides are substances or mixture of substances intended for preventing, destroying, repelling or mitigating any pest.A pesticide may be a chemical unicycle, biological agent , antimicrobial, disinfectant or device used against any pest...

 pollution and nitrate pollution. Further, agriculture uses large amounts of water, a scarce resource [citation?]. Some economists argue that taxes should be levied on agriculture, or that organic agriculture, which uses little pesticides and experiences relatively little nitrate runoff, should be encouraged with subsidies. In the United States, 65% of the approximately $16.5 billion in annual subsidies went to the top 10% of farmers in 2002 because subsidies are linked to certain commodities. On the other hand, organic farming received $5 million for help in certification and $15 million for research over a 5-year time period.

Fair trade

Some advocate Fair Trade rules to ensure that poor farmers in developing nations that produce crops primarily for export are not exploited or outcompeted - which advocates consider a dangerous "race to the bottom" in agricultural labor and safety standards. Opponents point out that most agriculture in developed nations is produced by industrial corporations (agribusiness) which are hardly deserving of sympathy, and that the alternative to exploitation is poverty.

Dumping of agricultural surpluses

In international trade parlance, when a company from country A sells a commodity below the cost of production into country B, this is called "dumping
Dumping (pricing policy)
In economics, "dumping" is any kind of predatory pricing, especially in the context of international trade. It occurs when manufacturers export a product to another country at a price either below the price charged in its home market, or in quantities that cannot be explained through normal market...

". A number of countries that are signatories to multilateral trade agreements have provisions that prohibit this practice.
When rich countries subsidize domestic production, excess output is often given to the developing world as foreign aid. This process eliminates the domestic market for agricultural products in the developing world, because the products can be obtained for free from western aid agencies. In developing nations where these effects are most severe, small farmers could no longer afford basic inputs and were forced to sell their land.

"Consider a farmer in Ghana
Ghana
Ghana , officially the Republic of Ghana, is a country located in West Africa. It is bordered by Côte d'Ivoire to the west, Burkina Faso to the north, Togo to the east, and the Gulf of Guinea to the south...

 who used to be able to make a living growing rice. Several years ago, Ghana was able to feed and export their surplus. Now, it imports rice. From where? Developed countries. Why? Because it's cheaper. Even if it costs the rice producer in the developed world much more to produce the rice, he doesn't have to make a profit from his crop. The government pays him to grow it, so he can sell it more cheaply to Ghana than the farmer in Ghana can. And that farmer in Ghana? He can't feed his family anymore."(Lyle Vanclief
Lyle Vanclief
Lyle Vanclief, PC was Canada's Minister of Agriculture from 1997-2003.Born in Ameliasburg, Ontario, he was first elected to the Canadian House of Commons as a Liberal Member of Parliament representing the rural Ontario riding of Prince Edward—Hastings in 1988...

, Former Canadian Minister of Agriculture [1997-2003])

According to The Institute for Agriculture and Trade Policy
Institute for Agriculture and Trade Policy
The Institute for Agriculture and Trade Policy is a non-profit research and advocacy organization that promotes sustainable food, farm, and trade systems...

, corn, soybeans, cotton, wheat and rice are sold below the cost of production, or dumped. Dumping rates are approximately forty percent for wheat, between twenty-five and thirty percent for corn (maize), approximately thirty percent for soybeans, fifty-seven percent for cotton, and approximately twenty percent for rice. For example, wheat is sold for forty percent below cost.

According to Oxfam, "If developed nations eliminated subsidy programs, the export value of agriculture in lesser developed nations would increase by 24 %, plus a further 5.5 % from tariff equilibrium. ... exporters can offer US surpluses for sale at prices around half the cost of production; destroying local agriculture and creating a captive market
Captive market
Captive markets are markets where the potential consumers face a severely limited amount of competitive suppliers; their only choices are to purchase what is available or to make no purchase at all. Captive markets result in higher prices and less diversity for consumers...

 in the process." Free trade advocates desire the elimination of all market distorting mechanisms (subsidies, tariffs, regulations) and argue that, as with free trade in all areas, this will result in aggregate benefit for all. This position is particularly popular in competitive agricultural exporting nations in both the developed and developing world, some of whom have banded together in the Cairns Group
Cairns Group
The Cairns Group is an interest group of 19 agricultural exporting countries, composed of Argentina, Australia, Bolivia, Brazil, Canada, Chile, Colombia, Costa Rica, Guatemala, Indonesia, Malaysia, New Zealand, Pakistan, Paraguay, Peru, the Philippines, South Africa, Thailand, and Uruguay.-History...

 lobby. Canada's Department of Agriculture estimates that developing nations would benefit by about $4 billion annually if subsidies in the developed world were halved.

Agricultural Independence

Many developing countries do not grow enough food to feed their own populations. These nations must buy food from other countries. Lower prices and free food save the lives of millions of starving people, despite the drop in food sales of the local farmers. A developing nation could use new improved farming methods to grow more food, with the ultimate goal of feeding their nation without outside help. New greenhouse methods, hydroponics, fertilizers, R/O Water Processors, hybrid crops, fast-growing hybrid trees for quick shade, interior temperature control, greenhouse or tent insulation, autonomous building
Autonomous building
An autonomous building is a building designed to be operated independently from infrastructural support services such as the electric power grid, gas grid, municipal water systems, sewage treatment systems, storm drains, communication services, and in some cases, public roads.Advocates of...

 gardens, sun lamps, mylar, fans, and other cheap tech can be used to grow crops on previously unarable land
Arable land
In geography and agriculture, arable land is land that can be used for growing crops. It includes all land under temporary crops , temporary meadows for mowing or pasture, land under market and kitchen gardens and land temporarily fallow...

, such as rocky, mountainous, desert, and even Arctic lands. More food can be grown, reducing dependency on other countries for food.

Replacement crops can also make nations agriculturally independent. Sugar, for example, comes from sugar cane imported from Polynesia
Polynesia
Polynesia is a subregion of Oceania, made up of over 1,000 islands scattered over the central and southern Pacific Ocean. The indigenous people who inhabit the islands of Polynesia are termed Polynesians and they share many similar traits including language, culture and beliefs...

. Instead of buying the sugar from Polynesia
Polynesia
Polynesia is a subregion of Oceania, made up of over 1,000 islands scattered over the central and southern Pacific Ocean. The indigenous people who inhabit the islands of Polynesia are termed Polynesians and they share many similar traits including language, culture and beliefs...

, a nation can make sugar from sugar beets, maple sap, or sweetener from stevia
Stevia
Stevia is a genus of about 240 species of herbs and shrubs in the sunflower family , native to subtropical and tropical regions from western North America to South America. The species Stevia rebaudiana, commonly known as sweetleaf, sweet leaf, sugarleaf, or simply stevia, is widely grown for its...

 plant, keeping the profits circulating within the nation's economy. Paper and clothes can be made of hemp instead of trees and cotton. Tropical foods won't grow in many places in Europe, but they will grow in insulated greenhouses or tents in Europe. Soybean plant cellulose can replace plastic (made from oil). Ethanol
Ethanol
Ethanol, also called ethyl alcohol, pure alcohol, grain alcohol, or drinking alcohol, is a volatile, flammable, colorless liquid. It is a psychoactive drug and one of the oldest recreational drugs. Best known as the type of alcohol found in alcoholic beverages, it is also used in thermometers, as a...

 from farm waste or hempseed oil can replace gasoline. Rainforest medicine plants grown locally can replace many imported medicines. Alternates of cash crops, like sugar and oil replacements, can reduce farmers' dependency on subsidies in both developed and developing nations.

Market interventions may increase the cost to consumers for agricultural products, either via hidden wealth-transfers via the government, or increased prices at the consumer level, such as for sugar and peanuts in the US. This has led to market distortion
Market distortion
In neoclassical economics, a market distortion is any event in which a market reaches a market clearing price for an item that is substantially different from the price that a market would achieve while operating under conditions of perfect competition and state enforcement of legal contracts and...

s, such as food processors using high fructose corn syrup as a replacement for sugar. High fructose corn syrup may be an unhealthy food additive, and, were sugar prices not inflated by government fiat, sugar might be preferred over high fructose corn syrup in the marketplace.

Overview: Europe and America

The farmer population is approximately five percent of the total population in the E.U. and 1.7% in the U.S. The total value of agricultural production in the E.U. amounted to 128 billion euros (1998). About forty-nine percent of this amount was accounted for by political measures: 37 billion euros due to direct payments and 43 billion euros from consumers due to the artificially high price. Eighty percent of European farmers receive a direct payment of 5,000 euros or less, while 2.2% receive a direct payment above 50,000 euros, totaling forty percent of all direct subsidies.

The average U.S. farmer receives $16,000 in annual subsidies. Two-thirds of farmers receive no direct payments. Of those that do, the average amount amongst the lowest paid eighty percent was $7000 from 1995-2003. (http://www.ewg.org/farm/findings.php) Subsidies are a mix of tax reductions, direct cash payments and below-market prices on water and other inputs. Some claim that these aggregate figures are misleading because large agribusiness
Agribusiness
In agriculture, agribusiness is a generic term for the various businesses involved in food production, including farming and contract farming, seed supply, agrichemicals, farm machinery, wholesale and distribution, processing, marketing, and retail sales....

es, rather than individual farmers, receive a significant share of total subsidy spending. The Federal Agriculture Improvement and Reform Act of 1996
Federal Agriculture Improvement and Reform Act of 1996
The Federal Agriculture Improvement and Reform Act of 1996 , known informally as the Freedom to Farm Act, the FAIR Act, or the 1996 U.S...

 reduced farm subsidies, providing fixed payments over a period and replacing price supports and subsidies. The Farm Security and Rural Investment Act of 2002
Farm Security and Rural Investment Act of 2002
The Farm Security and Rural Investment Act of 2002, also known as the 2002 Farm Bill, includes ten titles, addressing a great variety of issues related to agriculture, ecology, energy, trade, and nutrition....

 contains direct and countercyclical
Countercyclical
Countercyclical is a term used in economics to describe how an economic quantity is related to economic fluctuations. It is the opposite of procyclical. However, it has more than one meaning.-Meaning in policy making:...

 payments designed to limit the effects of low prices and yields.

In the EU, € 54 billion of subsidies are paid every year. An increasing share of the subsidies is being decoupled from production and lumped into the Single Farm Payment. While this has diminished the distortions created by the Common Agricultural Policy, many critics argue that a greater focus on the provision of public goods, such as biodiversity and clean water, is needed. The next major reform is expected for 2014, when a new long-term EU budget is coming into effect.

Environmental programs

The U.S. Conservation Reserve Program leases land from producers that take marginal land out of production and convert it back to a near-natural state by planting native grasses and other plants. See http://www.ers.usda.gov/publications/aer834/ The U.S. Environmental Quality Incentives Program subsidizes improvements which promote water conservation
Water conservation
Water conservation refers to reducing the usage of water and recycling of waste water for different purposes such as cleaning, manufacturing, and agricultural irrigation.- Water conservation :Water conservation can be defined as:...

 and other measures. This program is conducted under a bidding process using a formula where farmers request a certain percentage of cost share for an improvement such as drip irrigation. Producers that offer the most environmental improvement based on a point system for the least cost are funded first. The process continues until that year's allocated funds are expended. See http://www.nrcs.usda.gov/programs/eqip/.

World Trade Organization Actions

In April 2004 the WTO ruled that 3-billion dollars in US cotton subsidies violate trade agreements and that almost 50% of EU sugar exports are illegal. In 1997-2003, US cotton exports were subsidized by an average of 48%.http://www.iatp.org/iatp/library/admin/uploadedfiles/Agriculture_Export_Dumping_Booms_During_WTOs_F.pdfThe World Trade Organization
World Trade Organization
The World Trade Organization is an organization that intends to supervise and liberalize international trade. The organization officially commenced on January 1, 1995 under the Marrakech Agreement, replacing the General Agreement on Tariffs and Trade , which commenced in 1948...

 (WTO) has extracted commitments from the Philippines
Philippines
The Philippines , officially known as the Republic of the Philippines , is a country in Southeast Asia in the western Pacific Ocean. To its north across the Luzon Strait lies Taiwan. West across the South China Sea sits Vietnam...

 government, making it lower import barriers to half their present levels over a span of six years, and allowing in drastically increased competition from the industrialised and heavily subsidised farming systems of North America and Europe. A recent Oxfam
Oxfam
Oxfam is an international confederation of 15 organizations working in 98 countries worldwide to find lasting solutions to poverty and related injustice around the world. In all Oxfam’s actions, the ultimate goal is to enable people to exercise their rights and manage their own lives...

 report estimated that average household incomes of maize
Maize
Maize known in many English-speaking countries as corn or mielie/mealie, is a grain domesticated by indigenous peoples in Mesoamerica in prehistoric times. The leafy stalk produces ears which contain seeds called kernels. Though technically a grain, maize kernels are used in cooking as a vegetable...

 farmers will be reduced by as much as 30% over the six years as cheap imports from the US drive down prices in the local markets. The report estimates that in the absence of trade restrictions, US subsidised maize could be marketed at less than half the price of maize grown on the Philippine island
Island
An island or isle is any piece of sub-continental land that is surrounded by water. Very small islands such as emergent land features on atolls can be called islets, cays or keys. An island in a river or lake may be called an eyot , or holm...

 of Mindanao
Mindanao
Mindanao is the second largest and easternmost island in the Philippines. It is also the name of one of the three island groups in the country, which consists of the island of Mindanao and smaller surrounding islands. The other two are Luzon and the Visayas. The island of Mindanao is called The...

; and that the livelihoods of up to half a million Filipino maize farmers (out of the total 1.2 million) are under immediate threat.

See also

  • Agricultural economics
    Agricultural economics
    Agricultural economics originally applied the principles of economics to the production of crops and livestock — a discipline known as agronomics. Agronomics was a branch of economics that specifically dealt with land usage. It focused on maximizing the crop yield while maintaining a good soil...

  • Common Agricultural Policy
    Common Agricultural Policy
    The Common Agricultural Policy is a system of European Union agricultural subsidies and programmes. It represents 48% of the EU's budget, €49.8 billion in 2006 ....

  • Corn Laws
    Corn Laws
    The Corn Laws were trade barriers designed to protect cereal producers in the United Kingdom of Great Britain and Ireland against competition from less expensive foreign imports between 1815 and 1846. The barriers were introduced by the Importation Act 1815 and repealed by the Importation Act 1846...

  • Food price crisis
  • Land reform
    Land reform
    [Image:Jakarta farmers protest23.jpg|300px|thumb|right|Farmers protesting for Land Reform in Indonesia]Land reform involves the changing of laws, regulations or customs regarding land ownership. Land reform may consist of a government-initiated or government-backed property redistribution,...

  • Mixed economy
    Mixed economy
    Mixed economy is an economic system in which both the state and private sector direct the economy, reflecting characteristics of both market economies and planned economies. Most mixed economies can be described as market economies with strong regulatory oversight, in addition to having a variety...

  • Trade and development
    Trade and development
    Trade is a key factor in economic development. A successful use of trade can boost a country's development. On the other hand, opening up markets to international trade may leave local producers swamped by more competitive foreign producers.-Overview:...

  • Trade barriers

External links

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