Farm Subsidies

Veronique de Rugy Discusses Farm Subsidies on Bloomberg TV

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According to some U.S. policy makers, there is a global food crisis that can only be solved through massive government subsidies to farmers and other agricultural producers. In her weekly appearance on Bloomberg TV, Reason columnist Veronique de Rugy explains the truth about the so-called food crisis by separating economic fact from economic myth.

Myth 1: Because of the financial meltdown, and its repercussions on aid, the scale of hunger that we see now is unprecedented; more people face starvation related to disasters than ever before.

Fact 1: In fact, while unacceptably high, starvation deaths per year have been declining for the past 60 or 70 years. Better publicity, grain market integration, and work by aid agencies have decreased human deaths during each food crisis since the late 1950's.

Myth 2: Congress says farm subsidies insure a food supply for the US and for the World.

Fact 2: U.S. farm subsidies have exacerbated the balloon in world food prices. In fact, economists have found that abolishing domestic subsidies would actually lower world prices for these crops.

Myth 3: Farm subsidies are necessary to bolster farmers' incomes in order to alleviate poverty in the United States.

Fact 3: That rationale made some sense in the 1930s but it doesn't today. Despite the fact that farm households are doing as well or better than other households, farm households are still targeted for billions of dollars in government payments.

For additional information, see de Rugy' s article "Is There a Global Food Crisis?"

Approximately 4.05 minutes.

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