Farm Paid


Farm subsidies are the ultimate cash crop. Farmers in rich countries get $1 billion per day in government hand-outs. To be fair, that figure rounds up the numbers, counts agribusinesses and small farmers, and defines subsidies broadly to include tariffs, export credits and other supports. But, give a million or two a day, the order of magnitude is right. By that measure, agriculture is far and away the world's the most protected industry.

What do taxpayers get in return for this unparalleled generosity? A deeply distorted global food trade, with subsidies making nonsense of market prices. Farm subsides are the single biggest reason that the current round of World Trade Organization talks have dragged on since November 2001...

A new report from the International Institute of Sustainable Development,1 a pro-free trade group based in Geneva, makes a case that the American taxpayer is paying more in subsidies to produce each and every gallon of corn-based ethanol than it would cost to buy oil that produced the equivalent amount of energy. That's just nuts.

Are Americans at least getting reductions in net emissions of greenhouse gases for their money? Yes, but nothing like those elsewhere. Brazilians use sugarcane to make ethanol and Europeans wheat and sugar beet. Of the four crops, corn has the least impact on emission levels--spewing only 18% less pollution than conventional gasoline.

That is a benefit, but not a compellingly cost-efficient one...

  • 1Earth Track produced this analysis for IISD; the report can be accessed here. The report was an update to a broad survey of biofuel subsidies in the US that was released a year earlier, and can be accessed here.