Arvind Panagariya has consistently been the most insightful analyst of agricultural subsidy issues. In a Wall Street Journal article, he criticizes “fuzzy trade math”

Trade talks at Cancun broke down principally because the G-20 group of mainly larger developing countries rejected U.S. and EU offers on reducing their agricultural protection. Two years later, as the Hong Kong Ministerial approaches, agriculture remains the make-or-break issue in the Doha negotiations. But the impasse can be broken once we clear up the misinformation on (a) the magnitude of EU and U.S. subsidies and (b) the level of protection through trade barriers in developed and developing countries in agriculture.

The New York Times has editorialized that the “developed world funnels nearly $1 billion a day in subsidies,” which “encourages overproduction” and drives down prices. The World Bank’s president, Paul Wolfowitz, similarly referred to developed countries expending “$280 billion on support to agricultural producers” in an op-ed in the Financial Times. Oxfam routinely accuses rich countries of giving more than $300 billion annually in subsidies to agribusiness. Astonishingly, these estimates bear virtually no relationship to the subsidies actually at the heart of the Doha negotiations. Instead, they have their origins in the altogether different measure called the Producer Support Estimate (PSE), published by the OECD. The PSE includes all measures that raise the producer price above the world price, including border measures such as tariffs and quotas. All economists would find the identification of such a measure with subsidies unacceptable.

Read the whole thing.