1. US AGRICULTURAL SUBSIDIES
EVALUATION QUESTIONS IN
IB ECONOMICS
Date Due: Wednesday 6th December (3:00pm)

2. TASK SUMMARY
Evaluate the argument that US agricultural subsidies do more harm than good.
In your response you should consider:
The impact of agricultural subsidies on the US economy.
The level of agricultural subsidies provided in other developed countries.
The impact of US subsidies on world trade.
The impact of US subsidies on farmers in developing countries.
Refer to the stimulus material in this PPT, plus other sources provided.
Length: 500 words.

3. Remember your must use the four evaluation criteria in your response!

5. Source: https://www. slideshare

6. Are farm subsidies, just another form of welfare?

7. Agricultural subsidies aid the wealthy, not those in rural poverty
AMERICAN ENTERPRISE INSTITUTE
Agricultural subsidies aid the wealthy, not those in rural poverty
Vincent H. Smith, Ryan Nabil  November 11, :00 pm | InsideSources
As Congress and the current administration seek to reduce poverty, policymakers should be wary of wasteful programs that do little to help poor Americans. Agricultural subsidies — especially popular with the largest and wealthiest farm business operations — largely fall into that category.
Those subsidy programs are often marketed by farm interest groups as helping the rural poor, many of whom voted for the current president in key Electoral College states such as Pennsylvania, Wisconsin, Georgia, North Carolina and in the Florida panhandle. In fact, farm subsidy programs do little for the rural poor and even less for the urban poor (Article continues, next slide)

8. The subsidy programs that the House and Senate agricultural committees are defending and would like to expand include the federal crop insurance subsidy program, direct payments to farm businesses through so-called supplementary “farm income safety net” initiatives, and outlays on conservation programs.
Taken together, these programs cost about $20 billion every year. Crop insurance subsidies alone cost $8 billion, 30 percent of which goes to private insurance companies. Two additional “safety net” programs — price loss coverage and agricultural risk coverage — cost taxpayers between $6 billion and $8 billion in annual payments. Farm businesses also receive $5 billion a year in subsidies for adopting or simply continuing farming practices (such as soil conservation and protecting the environment) that are already being used because they are profitable. (Article continues, next slide)

9. Who gets all that federal money
Who gets all that federal money? About 70 percent of all crop insurance and other farm income safety net payments flow to 10 percent of the largest crop-producing farm businesses. This group comprises less than 100,000 farm operations, each of which on average receives more than $140,000 every year. Those farms are owned by households with annual incomes and levels of wealth that are multiple times higher than those of the typical American family, and certainly far higher than those of families in poverty. Conservation subsidy payments also predominantly flow to the largest farm operations and wealthiest farming households.
In contrast, 10 percent of the smallest farms receive a mere pittance, on average no more than about $50 — from the federal crop insurance and safety net programs. And the bottom 80 percent, including midsize farms, receive less than 10 percent of all subsidy payments. (Article continues, next slide)

10. Subsidy advocates have also argued that farm subsidies increase employment opportunities in rural areas, but there is no substantive evidence to support that claim. Labor needs continue to decline within and beyond farm households, and among farms that receive most of the subsidies. For example, about 70 percent of all crop insurance subsidies and other safety net program outlays are paid to the producers of three crops: corn, soybeans and wheat. The production of those crops is heavily mechanized and very little unskilled labor is needed. Conversely, farm enterprises that are more labor intensive such as those that raise livestock, and grow fruits and vegetables, receive very little in the way of direct farm subsidies.

11. The impact of US Subsidies on Trade:
OPINION Contributors
Farm subsidies are stifling free trade
by Clark Packard and contributor | Jul 13, 2017, 5:13 P
Read the full article at:
free-trade/article/

12. Like the United States, the European Union provides many subsidies to its farmers.

13. The WTO has tried since 1995 to reduce agricultural subsides in developed countries, but it has been largely unsuccessful.

15. What is the value of agricultural Subsidies in developed Countries?
OECD Website:
At this website scroll down and click on the ”table” option.
Determine the level of support for EU countries, versus the United States, Canada, Australia etc.
Which developed countries (top 2) are most dependent on subsidies?
Which developed countries (top 2) are least dependent on subsidies?
Include references to the data in your evaluation response.