Romney defends US ag subsidies

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Mitt Romney in a GOP debate, via Hit & Run:

We’re competing with European and Brazilian and other farmers, and we’re competing in a marketplace where they are heavily subsidized, at great disadvantage for our farmers. And so, if we’re going to change our support structure, we want to make sure that they change their support structure.

And we do this together, as opposed to unilaterally saying: We’re going to put our farmers in a tough position and have the farmers in the rest of the world continue to be subsidized.

Unfortunately for Mitt, European farm subsidies have been largely decoupled from production since 2003, so they aren’t triggering a surge in output or a flood of imports. Moreover, the European Union is due to reform its Common Agricultural Policy in 2008-09:

The European Commission unveiled plans Tuesday to shake up Europe’s farm subsidies in a bid to make costly hand-outs more relevant to the modern world as the sector enjoys the strongest boom in generations.

While past reforms have geared the European Union’s Common Agriculture Policy (CAP) towards reining in production, farmers are now struggling to keep up with surging demand fuelled by explosive growth in China and India.

Kicking off a six-month review of the CAP, the EU’s executive arm floated the idea of capping hand-outs to the biggest farms, phasing out milk quotas, scrapping rules on keeping land fallow and guaranteed minimum cereals prices.

Based on the findings of the review, the Commission is to come forward with reform proposals in May that would both modernise and simplify Europe’s support of its farms. [AFP]

So while Europeans seem to progress, US policy is getting worse. Moreover, I’ve never heard of Brazilian farmers receiving subsidies. Shame on Mr Romney for blaming others when the United States is the laggard.

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