OK, sometimes it helps to think about people instead of nations, but, well, sometimes it doesn't. I've thought about the various impacts on various people, and I'm still left with an unanswered question, albeit a more specific one: Are first-world agricultural subsidies bad for the developing world?
To answer that, I think I'm going to have to take apart the notion of a "farmer."
I shouldn't have to remind anyone that not all farms are "family farms;" you know, Maw, Paw, three chickens, a cow, forty acres, and, uh, seven children. There are big farms and small farms. Industrialized farms, and what we might call "developing" farms. Moreover, farm ownership isn't straightforward. There are sharecropped farms, and government-run farms, and farms whose rights are apportioned by village elders or established by lineage. I think the relevant question, here, is what
kinds of farm workers would benefit from an end to first-world agricultural subsidies?
The answer, in the simplest terms, is that, barring corruption, people who work on the most
efficient farms would benefit most. This is a bit of a tautology-- the most efficient farms are the ones that get the greatest yield per acre per dollar/euro/whatever spent, and in farming, as in so many other industries, the biggest cost is labor.
So which is better, a big farm in Somalia with tractors and manure spreaders and self-propelled sprinkler systems and 60 farm hands, or a big farm in Uganda with no machinery at all and 800 workers? If they both produce the same output, the former is likely to provide much better wages, while the latter will provide many more jobs.
If I had to work on a farm... hey, wait. I
don't want to work on a farm! And I'm not alone, either. Farming is lousy work. The hours are long, it's hard physical labor, you smell like manure at the end of the day, and even if you're not too exhausted to wash up and go out, there's nowhere to go, becuase you live and work
on a farm, damn it, and not in a city or town where there's stuff to do after work. People historically have tried to get
away from farm work at the first opportunity. Why do we want third-world people to work on farms? Why on earth should we suppose they'll eventually be any better off than the migrant farm workers we've got in the US, for Pete's sake?
Well, OK, if I had to work on a farm, then I'd rather work on the mechanized farm than a non-mechanized one. But that kills jobs! What are we going to do with all the unemployed former farmhands, when those third-world farms make a profit in the glorious new subsidy-free world market, and use those profits to buy combine harvesters and crop dusters?
And if the third world does modernize its farms, won't that flood the market with cheap agricultural products? Thereby screwing the third-world farmers who
don't buy milking machines? In the free market, wouldn't large-scale mechanized farming win out over mom-n-pop farming?
Well, all that cheap imported third-world-produced food might one day mess things up for the small farmer, but it will be damned good news for all the people who used to work on the plantations, but had to move into the shantytowns surrounding the cities when the owners started buying machinery.
It's all very well and good to point to the transformation of European farming in the Medieval and Early Modern periods, but can you really compare those economies to what we see in the world today? Europe progressed in large part because they were
inventing the new technology as they went, and benefitting from it; in the developing world today, the machines
already exist.
I guess part of what I'm getting at, here, is that I believe the distinction between "agriculture" and "industry" is a poor one. I think a lot of people, especially people on the left in the West, tend to think of Farming in semi-magical terms, as if it's supposed to live up to some gauzy pastoral ideal, and as a consequence, a lot of the conclusions they reach about it are based more on (often outdated) cultural values than on any rational understanding of modern agriculture.
(other examples would include the GM food debate, the "organic food" movement, and perhaps the radical vegan/vegetarian fringe, too)
No, I don't think first world agricultural subsidies are bad for "the third world." I don't have any answers to the pressing quesion of how to turn the "developing" world into the "developing at a more gratifying pace" world, but it looks to me like "end agricultural subsidies" is an empty promise, in that it would likely result in no discernable improvement, and might in fact make things worse.
There are good reasons to oppose subsidies, of course, but I don't think brandishing the plight of the poor, heavily mythologized third-world farmer is one of them.
Update,
10/27: Found an excellent
article about irrational attitudes toward organic and GM crops.
Why are agricultural subsidies bad? Good question! Sometimes it helps to think of people instead of countries. If you're a food consumer in a rich country (if?), subsidies in rich countries are bad because you pay more in high taxes than you get in cheaper food (I've seen estimates of around $200 per person per year for Germans). If you're a farmer in a poor country, they're bad because they lower the price you get for your crops, which makes you poorer. And since farmers in poor countries make, oh, $2/day or so, that really, really hurts.
If you're a (probably urban) food consumer in a poor country, agricultural subsidies make food cheaper, which is good. And if you're a farmer in a rich country, they make you a lot richer (technically, it makes whoever owns farmland richer, but that's another story).
But this leads to another question: what are people in poor countries supposed to do? How do poor countries become less poor? I heard Paul Krugman on the radio a couple days ago talking about how in the 1970s development economics was an especially depressing (he should have said dismal) field, because the most recent success story was Japan, in the late 1800s!
I think generally countries in Europe became wealthier when agricultural productivity increased (the Dark Ages saw the invention of crop rotation, water wheels, etc) and not everybody had to be a farmer to eat. People could be craftsmen, merchants, teachers, etc.
Maybe poor agricultural countries need that stage? Is it like setting the minimum wage too high, and telling the workers priced out of the market that they're better off not working anyway?
Farmers in poor countries often suffer under price controls. Farmers are required to sell their crops to the government below the market price, and the government (the corrupt dictator and his tribe) sells at the international price, pocketing the difference. Ending rich country agricultural subsidies might just make only dictators richer in some poor countries.
Since the 1970s countries like South Korea, Singapore, Taiwan, and Hong Kong have done pretty well with what's called export-led growth (countries that tried import substitution, like India, have had poor, and in some cases zero economic growth since the end of the colonial period).
So yeah, if people in Senegal got out of the farming business, and started making all the cheap plastic stuff that's made in China, they'd be all set. What's stopping them? Probably corrupt governments and a lack of entrepreneurs, but I don't really know.
Why are agricultural subsidies bad?
I've been nosing around trying to figure out what the heck happened in the Cancun round of WTO talks. Everyone seems to agree that things didn't work out, but no-one seems to be able to figure out why. The anti-WTO brigade says that the breakdown proves they were right all along, in that the WTO isn't really working to promote free trade, but rather to promote the interests of "the corporations" or "rich nations" or "Bush's cronies." Needless to say, I don't find these explanations particularly compelling; the WTO hasn't lived up to its ideals yet, but that doesn't mean it's part of a grand conspiracy of plutocrats.
Daniel Davies
says Cancun was torpedoed by a dispute over a set of proposed international investment rules collectively referred to as "Singapore Issues." There's a conspiracy-theory edge to the idea (the EU deliberately used Singapore Issues to derail the talks! Alack! Alarum!), and I initially had a bit of trouble understanding why it would be a bad thing to have some rules making it easier for foreigners to invest in developing nations. How would more money be a
bad thing? It seems, though, that there's some question of national autonomy at stake; the rules in question would make it difficult for nations to put government money into local businesses for things like research or health care or other things that governments like to promote. Brad Delong, lovable "neoliberal" (Am I missing something, or does that term mean "libertarian, except sort of leftish?")
takes Davies to task for preferring governments to markets (and takes a gratuitous slap at Bush in the process). Delong's readers in turn take him to task for preferring markets to governments, and I'm left not knowing quite what to think.
So, while I was scratching my head and trying to figure out whether or not these Singapore Issues rules were good or bad, I read a comment somewhere that asked a much better question, one that nobody has answered to my satisfaction. The question is the one at the top of this ramble, and I think it relates to the foreign investment muddle. Why are agricultural subsidies bad? In particular, why on earth are
lower food prices bad for the developing world? I understand the idea that lower prices make it harder for developing nations to export agricultural goods, but don't they also make it easier for those same nations to
eat? Shouldn't those low food prices make it easier for a poor nation to take the step from subsistence agriculture to a more diverse economy?
Why is it wrong for the US and France and their ilk to use government money in a way that makes it easier for other nations to buy food? The only arguments I can think of invoke principles of self-sufficiency or national autonomy-- principles that have no place in the sort of economic models that demonstrate the virtues of open markets, or in political outlooks that embrace those models. And it seems to me these same sorts of principles are at stake in those Singapore Issues that have me so confused.
