| In The News #4 >> | ||
>> TITLE U.S., EU Agree to Reduce Farm Aid Lead Story-Dateline: >> SUMMARY Europe and the United States recently reached a compromise on farm subsidies designed to provide a boost to stalled world trade talks. The pact addresses reduction of domestic price supports, export subsidies, and tariffs on agricultural products. To date, few details have been provided but it appears the Bush administration agreed to soften its stance by reducing its loan-guarantee program for farm exports. The European Union agreed to similar cuts in some of its agricultural export subsidies. The agreement on agriculture is seen as a significant first step in further negotiations on other protected goods. Under tentative guidelines both trading partners would scale back on protectionist policies simultaneously. The Bush administration believes (and hopes) that any losses from reduced government checks will be offset by additional overseas sales. >> Talking it Over and Thinking it Through
>> Thinking About the Future Agricultural subsidies are one of the most emotionally charged issues in the United States. Willie Nelson and John Mellencamp continue to croon about the loss of the family farm and many persons of that political bent prefer a more protectionist posture from our lawmakers. However, technology has increased agricultural production to a point where significant economies of scale exist. As farm size increases, and more and more “family farms” turn into corporate farms, the question should become less of an emotional hot-button issue politically and more of a pure economic issue.
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