Final Draft: Opinion Writing

Surprising Harm: Agricultural Subsidies

 

             In my opinion, the Government should not continue to give agricultural subsidies[1] 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[2] also criticized that direct support funding can disturb the liberalization severely. According to CBO[3], 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[4]'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

 

Contents reference

(Website)

[사설]"농업보조금부터 줄여야 농업 경쟁력 생긴다." (2015, August 17). Retrieved November 28, 2015, from http://www.hankyung.com/news/app/newsview.php?aid=2015081750971&intype=1

농업보조금은 독약인가 보약인가? (2014, April 9). Retrieved November 28, 2015, from No subsidies makes them innovate their quality of crops

태선, 정 (Ed.). (2011, September 14). [뉴질랜드 선진농업]보조금 없애자 경쟁력 생겼다. Retrieved November 28, 2015, from http://news.joins.com/article/6184444

뉴질랜드 여행의 모든것 www.ilovenztravel.co.nz. (2011, September 20). Retrieved November 28, 2015, from http://ilovenelson.blog.me/30118709863

국민권익위원회. (2013, September 6). Retrieved November 28, 2015, from http://blog.daum.net/loveacrc/6810

[사설] "농업보조금, 진짜 농민 아닌 '로비 농민' 차지다" (2012, March 16). Retrieved November 28, 2015, from http://news.chosun.com/site/data/html_dir/2012/03/16/2012031602659.html

세계의 농업보조금. (2011, June 11). Retrieved November 28, 2015, from http://blog.naver.com/saranmul/20131165278

Congressional Budget Office. (2008). Retrieved November 28, 2015, from https://www.cbo.gov/

(book)

Guillochon, B. (2003). La mondialisation: Une seule planète, des projets divergents. Paris: Larousse.

Ch'ŏmdan nongŏp puguk ŭi kil = Agrigento Korea (Ch'op'an. ed.). (2010). 매일출판(매일경제신문사).

Image reference

Agricultural policy of the United States and Food, Conservation, and Energy Act of 2008. (2008). Retrieved November 28, 2015, from https://www.cbo.gov/

Reference Citation

(n.d.). Retrieved November 28, 2015, from https://www.wto.org/

Congressional Budget Office. (2008). Retrieved November 28, 2015, from https://www.cbo.gov/