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December 18, 2007

Farmers keep their snouts in the trough

As the Doha international trade talks rumble on between stalemate and inertia, it is business as usual for farmers in the United States. Once again the most powerful lobby in the world - farmers - has flexed its muscles and politicians have crumbled. As caller.com reports, the Senate has rejected measures that would merely put a cap on the rich subsidies that  farmers enjoy in the US and which prevent developing countries from growing similar crops economically.

Elimination of subsidies wold not only return money to US taxpayers it would also give an unprecedented boost to Third  World agriculture. It is not often that politicians are offered such a free lunch but once again they have bowed to the self-interest of a tiny minority of their constituents. What next? We will have to wait another five years before the issue is debated again . . . unless President Bush uses his veto on the bill. And pigs will fly.

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It's just a myth that developin countries are not able to export because of subsidies in industrialized countries. Brasil and Argentina are doing nicely and exporting a lot, so they see no problems in their trade. Palm oil demand is high and the same goes for sugar. There are plenty of products that the developing countries can export easily but as some of them can't even feed their own population, how could they export food.

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According to a Washington Post op-ed by former President Jimmy Carter, cotton costs 73 cents per pound to grow here but only 21 cents in Burkina Faso.

Sound to me like a clear case of comparative advantage. Let Africa grow cotton.

We should stop growing cotton altogether and do other things.

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