Surprising Harm: Agricultural Subsidies
In my opinion, the Government should not continue to give agricultural subsidies
to farmers because they have several side-effects, such as losing competitiveness, risks
of industrial expansion, disturbance of freedom and possibilities of corruptions.
Many people claim that these agricultural subsidies have only advantageous
effects to farmers and agricultural economy. Agricultural subsidies are good
news to many farmers because they are direct funds to them. Farmers can use the
fund to expand their business, or invest to increase productivity of their
crops. However, there are also considerable negative effects. First of all, agricultural subsidies make certain
countries lose agricultural competitiveness. According to “Agrigento Korea” by Maeil Business Newspaper, the reason that certain countries lose their agricultural competitiveness is because agricultural subsidies are
only given to the farmers who cultivate the main crops of the
country. This phenomenon may cause many farmers to cultivate main crops. As a
result, many special crops couldn’t be cultivated and invested in. For example,
Korean staple diet is rice, and most of the Korean farmers cultivate rice. Therefore,
Korea has less competitiveness on other crops. On the other hand, New Zealand cut off all of agricultural subsidies to farmers and the result was amazingly
successful. According to the National Statistical Office of New Zealand, Agriculture accounted for 14 percent of the total
GDP in previous
days. However, it increased by 2 percent, and now agriculture accounts for
16.percent of the total GDP. According to Errol Hewitt, professor of Massey University, New
Zealand, farmers were able to attain competitiveness in global market without
subsidies by upgrading their quality of crops. This case
shows the punctuation of agricultural subsidies can help a country to
get agricultural competitiveness. Secondly, agricultural
subsidies make farmers expand their business, which could be dangerous. The
farmers tend to use provided subsidies and debt in order to expand their
agricultural business to earn more subsidies because the bigger the business
scale, the more government gives subsidies to the farmers. Expansion of business seems to be
successful, in fact, it gives burden to farmers. Eventually, this will make them
unable to control their expanded agricultural business. For instance, according
to the interview of a farmer in Korea, they borrowed considerable amount of money to
expand their business at first, but now, they worry about how much they have to
invest more in this business, and also say that many Korean farmers are in
similar situations like him. However, if there are no laws for subsidies, the
farmers won’t struggle to expand their business forcedly in order to earn
subsidies.

Thirdly,
these funds hinder the liberalization of
trade. It is because many developed countries give large amount of money to
their farmers which stabilizes the farmers income, but it may worsen the fairness. In this case, WTO also criticized that direct support funding can disturb the
liberalization severely. According to
CBO, the U.S. support about 20 billion
dollars annually for the stabilization of
farmers' income. It aggravates inequalities of competition. If there are
no subsidies provided to farmers, the developing countries will also have an
equal trade chance like developed countries in the global market. Last but not
least, agricultural subsidies can cause corruption as it is easy for
many officials to embezzle the funds. This is
because there are many blind spots that aren’t punished. For instance, the results of the ACRC's report shows that there are about 16 corruption-related
reports monthly. This means that most subsidies are not given to farmer directly.
If there were no subsidies-related laws, government could use the fund more
efficiently. In conclusion, due to these 4 important reasons, I believe that subsidies are unnecessary and they can even have negative influences to the farmers. Therefore,
the Government should stop the continuation to support farmers with agricultural funds, and they should cut off unnecessary agricultural subsidies as soon as possible.
[1] Agricultural Subsidies:
Money which the government gives to farmer in their
country for serving their livelihood. There are 2 kinds of agricultural
Subsidies. One is direct support fund and the other one is fund for supporting
their export.
[2] WTO: World Trade
Organization
The WTO is a rules-based, member-driven organization —
all decisions are made by the member governments, and the rules are the outcome
of negotiations among members.
[3] CBO: Congressional Budget
Office
Since 1975, CBO has produced
independent analyses of budgetary and economic issues to support the
Congressional budget process. Each year, the agency’s economists and budget
analysts produce dozens of reports and hundreds of cost estimates for proposed
legislation.
[4] ACRC: The Anti-Corruption & Civil Rights Commission
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