American and European food subsidies actually act to support growth and productivity in the developing world. The kinds of foodstuffs typically exported to poorer states are staples like wheat, maize, milk products and sugar. Subsidy and food aid schemes ensure that basic goods are available to consumers in poorer states at prices lower than a domestic market could comfortably sustain.[i]

It is arguable that the most efficient development solution for many of the world’s poorest states does not include investing in capital intensive commodity crops. Spending on fertilisers, land and equipment is essential for farmers seeking to grow sufficient quantities of corn or soy to compete in global and local market places. The scale of capital investment required by maize and wheat is so high that domestic food prices within many African and Asian states would jump rapidly if wholesalers, manufacturers and families were no longer able to acquire these commodities via subsidised imports from developed countries.

Agricultural businesses in the developing world are more likely to profit from exports of labour-intensive produce. Palm oil, prepared vegetables, spices, cocoa and cut flowers are crops that can only be produced in a narrow range of climates and environments. The geographical locations of the largest palm oil and cocoa producers give them a competitive advantage over more prosperous northerly states. Similarly, the higher price commanded by commodities that are difficult to produce in other areas of the world means that farmers’ profit margins will be wider once they have accounted for transportation costs. Compare this situation with the profit made on processed potatoes in the US and the UK- often fractions of a penny or a cent- and the advantages of exporting value-added goods become obvious.[ii]

There is much about the proposition side case that smacks of orientalism. The quality of life of individuals in many of the world’s poorest states has been immeasurably improved by the ready availability of cheap western food imports.[i] The ability of western farmers to provide food at lower prices than their competitors in the developing world’s domestic market is actually driving growth and productivity among poor agricultural producers.

Subsidies’ contribution to poor agricultural production in the developing world is marginal. Indeed, many of the poorest states trade with European Countries on terms as favourable as those set out in the treaties of the European Union. Under the Everything But Arms scheme, underdeveloped states can export goods to EU states without being required to pay tariffs or customs charges.[ii] Further, as noted below, changes to the CAP have now create a European subsidy regime that carefully controls production rates, punishes over production and ensures  surpluses are not “dumped” onto the export market. Under a range of partnership agreements, the EU now sources 71% of its agricultural imports from developing states.[iii]

Increasing developing state’s dependence on their domestic agricultural markets is likely to increase food prices within their borders. The relative level of sophistication of developing states’ transport infrastructure and agricultural technologies is much lower than in Europe. Consequently, the cost of producing a commodity- grain, say- within a developing nation, and then transporting it to consumers will be much higher. Poorly maintained roads will increase journey times and will cause a larger proportion of stock to spoil before it can be sold. Credit and stock systems will be slow and undeveloped, impacting on the efficiency of doing business with local farmers.

All of the factors listed above also affect export trade. While international travel may be a relatively fast and efficient affair, the process of moving bulky agricultural goods to ports and airports, let alone soliciting and processing orders from European importers, will prove extremely difficult for farmers in the developing world.[iv] The diversification of the food export industry envisioned by side proposition simply will not happen. Underfunding and underdevelopment of infrastructure in poorer states will not allow it. Moreover, the increased cost of transporting goods across rural areas, particularly as many of the poorest countries are cursed with being landlocked, in the subcontinent or Africa places a premium on food before it even reaches the communities that will consume it.[v] At the very least, the controlled reduction of food prices by subsidies ensures that this premium is affordable.

Attempts by side proposition to imply that rural communities suffer disproportionately under the current subsidies scheme are rendered nonsensical by the observation that not all agricultural goods are staple foods. Growers of tobacco or coffee and the other forms of labour intensive export goods mentioned above are already engaged in a trade that has a great deal of developmental potential. However, requiring them to pay higher prices for domestically produced food might undermine the profits farmers make on flowers or spices. Moreover very few rural populations are entirely self-sufficient, and will always require access to external supplies of staple products.[vi]

Even adamant anti subsidy advocates agree that abolishing current financial assistance measures will do more harm than good. Reform of current subsidy policies would achieve more than their complete elimination. Many family farms in the US and the EU are running on extremely slim profit margins, which are squeezed by supermarkets,[i] and eliminating their subsidy payments would devastate their incomes, forcing the sale of land and the sale or slaughter of livestock.

The lacunae and negligent administrative conduct that anti-subsidy campaigners claim is characteristic of the policy’s overall inefficiency are simply design flaws that appropriate legislation can correct. Both the Rural America Preservation Act[ii] and the 2002 Farm Bill[iii] offer the opportunity to remove many of these negative traits from America’s farm subsidy regime. They will cap the amount given to large, heavily capitalised agricultural corporations. These policies will also assist in encouraging the conservation and husbandry of natural resources, and ensuring the health of existing farm soil. Policy makers already recognise the perversity of paying owners of farmland large sums simply to keep the land clear and ready for agricultural use, without also monitoring

Similarly, in Europe, reforms to the Common Agricultural Policy following the ratification of the Treaty of Nice in 2003 now require farmers to engage in sustainable agricultural practices. Penalties reduce the size of the subsidy available to farmers who disregard the limits imposed by the Treaty. The EU is also due to begin applying a policy of intervention pricing. Intervention pricing represents a form of dynamic subsidy. If commodity prices fall below a certain level, the EU will buy up produce in order to raise its price. This method allows the EU to reduce standard subsidy payments, which might incentivise overproduction during periods of economic stability, while allowing it to protect farmer’s incomes if market prices fall.