Agricultural Subsidies

In: Business and Management

Submitted By tud45485
Words 336
Pages 2
Deeksha Singh
Fundamentals of International Business
September 25, 2012
Agricultural Subsidies and Development
Summary of Case Study: Agricultural Subsidies and Development
The closing case describes the government sponsored subsidies and tariffs on agricultural products in the United States and EU countries. The subsidies and tariffs protect farmers in those countries from low commodity prices, however at the same time, hurt farmers in the developing nations. According to the United Nation, the subsidies and tariffs effectively cancel out the aid provided by the developed world to the developing nations by limiting export earnings from agricultural products. Discussion of this case can revolve around the following questions:

1) If agricultural tariffs and subsidies to producers were removed overnight, what would the impact be on the average consumer in developed nations such as the US and the EU countries? What would the impact be on the average farmer? Do you think the total benefits outweigh the total cost or vice versa?
I believe if agricultural tariffs and subsidies were removed overnight the impact on the average consumer in a developed nation would be, the prices of goods would rise because developed nations would no longer be dumping the surplus of good on the world market. The impact on the average farmer would be that they are no longer protected from international demand and prices. I do not think the total benefits outweigh the cost; they should remove all tariffs and subsidies and make it possible for developing countries to be able to compete in the world market.

2) Which do you think would help the citizens of the world’s poorest nations more, increasing foreign aid or removing all agricultural tariffs and subsides?
The best thing to do would be to remove all agricultural tariffs and subsides and give people in developing nations…...

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