How U.S. Agricultural Subsidies Harm the Environment, Taxpayers and the Poor

Proponents of agricultural subsidies often justify them as necessary to compete in international agricultural markets and ensure a variety of plentiful, inexpensive food for domestic consumers. The federal government offers a wide range of aid to farmers, including: price supports and price floor programs; crop insurance — against both lost crops and lower than expected prices; government purchases of excess food stocks; and promotion of domestic crops through international trade agreements, says Marcelo Ostria, a research associate with the National Center for Policy Analysis.

These agricultural subsidies distort trade, which adversely affects poor farmers and environmental protection in developing countries. Subsidies also impose a fiscal burden on taxpayers.

Oxfam International notes that the more than 10 million people in Central and Western African countries who rely on the production and sale of cotton lose up to $250 million every year due to subsidies.

Subsidies also invite retaliation under World Trade Organization (WTO) rules. In 2009, a WTO arbitration panel granted Brazil the authority to collect $147.3 million damages, to impose punitive tariffs, and to lift patent protections on $829 million worth of U.S. goods.

Overproduction caused by subsidies also results in unintended environmental harms. In pursuit of subsidies, farmers often cultivate marginal farmland, where the thin soil is unable to replace depleted nutrients.

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