Agricultural Economics Department


Date of this Version



Published in Cornhusker Economics, 03/01/2006. Produced by the Cooperative Extension, Institute of Agriculture and Natural Resources, Department of Agricultural Economics, University of Nebraska–Lincoln.


Government subsidies for agriculture in the industrialized nations of North America, Western Europe and East Asia (Japan and South Korea) have been severely criticized by many commentators because of their negative impact on developing countries. (See, for example, “Protecting the French Farmer,” from the editorial page of the New York Times, December 8, 2005). Many have noted that these wealthy countries subsidize their farmers at the rate of a billion dollars a day and that the resulting overproduction depresses world prices to the detriment of low-income countries that depend on agricultural exports. Agricultural subsidies have been a major issue during both the Uruguay Round and the current Doha Round of trade negotiations at the World Trade Organization (WTO). In addition, a WTO dispute resolution panel ruled in favor of Brazil and four African countries that had filed a complaint against U.S. cotton subsidies and many developing countries are taking a hard line on all agricultural subsidies in the current talks.