In Europe and the United States are receiving tremendous amounts in subsidies. By doing so there is a win-win situation for farmers. There is guaranteed income and they have the proceeds of the sold products. With the strong political power, they have we see changes are not happening quickly.
The reason we have those subsidies was to avoid the food producers to go bankrupted and bring the society in danger. Where will the food come from? But by doing so we saw inefficiency and limitations on innovations.
If we see what works best for the world and the people than we see that removing subsidies work. Before you say that this never happened, that happened.
In 1985 the New Zeeland government removed all farming subsidies and removed all trade barriers. By doing so farmers stopped with the overproduction. The farmers had to decide what the market wishes and provide this at the price the market is prepared to pay for it.
When the subsidies were removed the oversupply of sheep meat was ended. No longer 6,000 tonnes of sheep meat was literally thrown away. At the expense of the taxpayers.
Is this a smart idea in your opinion? Throwing all that food away.
If we look at the world than it is clear that everyone is subsidizing the farmers.
The farm subsidies and protectionism are one of the big obstacles towards economic freedom and free trade. Economic freedom and the trade which comes from it is important, after all: this is what lifted over 700 million people out of absolute poverty.
When we see at the talks on free trade between the European Union and the United States, we see that the deal is doomed from the start. After all: both economic powerhouses are subsidizing and protecting farmers. This at the expense of the rest of society.
Why are we not allowing innovation to come in the agriculture market? Not at the expense of the society, but at the expense of brave entrepreneurs who are doing the honorable thing: serving the customers.