What would happened to US and European economies if farmers there would not get any farm’s subsidies?
From what I know billions of dollars/euros a year go to subsidize farm production in the west while farmers in poorer countries can not compete on a “free” market.
If subsidies did not exist would farmers in third world countries prosper?
.How does whole subsidies thing works?
Thanks for any input.
I worked in the UK sugar industry for many years so I know how the subsidies work in the EU in this industry fairly well. Basically the minimum price of sugar is set artificially high. The consumer has to pay say £500 per tonne instead of the world market price of say £180. The sugar industry and farmers do very well out of it up to the quota allowed by the EU (in the UK 1.14 million tonnes of beet sugar). Any sugar produced in excess of the quota makes money for the sugar producer but costs money for the farmer. The farmer contracts, however, contain big penalties for farmers who do not produce what they say they will, so they tend to over produce. As a result, in the UK, beet sugar production tends to be say 1.5 million tonnes per year. All the excess above the quota is exported into the world market, regardless of what price is paid for it. The result is the EU dumps millions of tonnes of sugar on the market, and “3rd world” countries find they can barely compete. The US also subsidises its market, but most other counties are pissed off by these Western subsidies. Australia is one Westren country that manages to run an industry at world market prices, but like 3rd world producers they would make much more money if US and EU subsidies were abolished.
On rereading that should be $500 and $180 per tonne respectively.