Crop Subsidies Common and Increasing Outside the U.S.

U.S. agriculture subsidies may provide an easy target of blame for suppressing farm prices abroad, but developing countries are equally, if not more, prone to protecting their agricultural sectors.

Written by Cory Chandler

U.S. agriculture subsidies may get lambasted by the international press for suppressing farm prices abroad, but a study by Texas Tech University economists finds that developing countries are equally, if not more, prone to protecting their agricultural sectors.

Researchers in Texas Tech’s Cotton Economics Research Institute studied the agricultural subsidies and protection applied by 21 countries to seven major crops: corn, cotton, rice, sorghum, soybeans, sugar and wheat.

The resulting report, Crop Subsidies in Foreign Countries: Different Paths to Common Goals, found that while policy tools employed by governments may differ, agricultural support is increasing not only in industrialized countries such as the U.S. or Australia, but in developing economies such as those of China or Brazil.

“U.S. agriculture has been openly criticized by international organizations and eminent academicians for its subsidies and protection programs,” study authors wrote. “Overall, the study concludes that agriculture has a special status in both developed and developing countries with a wide variety of subsidy and protection instruments in place. Developed countries certainly subsidize and protect their agricultural sectors.”

Developing countries employ higher tariff protection than their industrialized peers, researchers found, and also tend to supplement their price support program with input subsidies, which are excluded from World Trade Organization support calculations but still distort trade.

Click the following link to access the full report:

Funding for the research was provided by the Cooperative State Research, Education and Extension Service, USDA through the International Cotton Research Center and Texas Tech’s Larry Combest Chair of Agricultural Competitiveness.

CONTACT: Darren Hudson, director, Cotton Economics Research Institute, College of Agricultural Sciences and Natural Resources, Texas Tech University, (806) 742-2821 ext. 272, or