Cheap Exports -
Farm policy in the US and EU involves buying the farmers' surpluses and storing them. These are then dumped as 'aid' or sold cheap to developing countries. Some surpluses are converted into meat and dairy products that are then exported or given away - a convenient disposal route.
In Mexico, where subsidised American maize is imported under the North American Free Trade Agreement (NAFTA), 15 million people will lose their livelihoods. Without US subsidies Mexican farmers could export maize to the US. In the dry Sahel countries of Africa, small farmers cannot compete with EU dumping of surplus subsidised cereals and so move to the cities in search of work. The land is left to pastoral nomads whose animals graze away what little vegetation there is, increasing desertification.
World Food Price Distortion - It is the Chicago Board of Trade that sets low prices for agricultural commodities: pork bellies, beef, corn, soybeans, wheat and soybean oil. These prices then become the yardstick for world pricing. It might be called a 'market' but prices are more the result of Government subsidy policy than of market laws of supply and demand. All this influence - and the US has only eight per cent of the world's arable land!
The average American farm now earns half its income from government subsidies, but the level of subsidy to corn and soybean farmers is higher still - nearly 100 per cent. Without subsidies prices would have to double and the income of all the world's food producers would increase dramatically.
