President Bush says yep we'll end subsidies

By Tim Worstall | 4 July 2005

President George Bush has made an offer as reported by the London Times this morning:

Asked directly if America would drop its subsidy system if the EU abandoned the Common Agricultural Policy (CAP), Mr Bush said: "Absolutely. And I think we have an obligation to work together to do that.

"Because if we do achieve this business of free trade, and if markets in the West are opened up to countries in Africa, they could be so successful, they could eliminate the need for aid. The benefits that have come from opening up markets - our markets to them and their markets to us - far outweigh the benefits of aid."

Bush's proposal faces a huge fight. If Schroeder and Chirac do not manage to scupper it then it will face opposition from American politicians from the farm states, as shown by the difficulties over CAFTA and the pandering to the sugar lobby that had to be done to ensure passage through the Senate.

An interesting note is that, as the International Herald Tribune points out, the abolition of farm subsidies in New Zealand has benefited both farmers and the wider economy, so much so that the farmers don't want them back.

Ian Ewen-Street, agriculture spokesman for the Greens Party of New Zealand, himself a farmer, said that any attempt to bring back subsidies would face intense opposition, led by farmers.

One final observation, even if the Common Agricultural Policy was abolished overnight there would still be problems for African farmers in exporting to Europe in the form of non-tariff barriers. Of which the recent Farm to Fork program is an egregious example. By insisting upon endless paperwork on the sourcing and provenance of each and every piece of produce this scheme will make it extremely difficult for exporters to compete.