Study: Cutting farm subsidies will increase exports
A new study from the R Street Institute found that if the U.S. want to open international markets, the government must curb agricultural subsidies.
“As Congress begins piecing together the next farm bill, it is important for legislators to understand that overly generous domestic agricultural subsidies hamper our ability to expand foreign trade in agricultural products,” said Clark Packard, R Street Institute trade policy analyst. “To get serious about opening markets abroad, policymakers need to prioritize curbing domestic agriculture subsidies.”
He said given the failure of the World Trade Organization’s Doha Round and the Trump administration’s professed hostility toward multilateral negotiations, broad-scale multilateral reform may seem unrealistic.
“Thankfully, the administration’s budget proposal would cut crop insurance subsidies and commodity support payments in ways that, if adopted by Congress, would curb agricultural subsidies by $38 billion over 10 years, giving the United States major leverage to negotiate better terms for American farmers and ranchers abroad,” Packard said.
He said that it’s “always tempting to kick the subsidy reform can further down the road.”
“But delaying difficult but necessary reforms only hampers our ability to expand market access abroad,” Packard said. “In order to make a credible case for further liberalization, we must lead by example and cut our own agricultural subsides.”