Redefining the Role of Government in Agriculture for the 1990s Book

Government policies in agriculture have been costly and misdirected world wide. In developed countries, those policies cost taxpayers and consumers hundreds of billions of dollars every year. In developing countries, policies have impoverished rural people without providing food security. This need not continue. The Uruguay Round is an ideal opportunity for developed and developing nations to strike a bargain, the elements of which should be to: 1) make agricultural trade subject to the full discipline of GATT; 2) bring developing countries fully into GATT by eliminating their special status, which allows them to avoid reciprocity in trade policy reform and to protect infant industries for balance of payment purposes; and 3) get all countries to reduce the many policy-induced distortions that plague the sector including import restrictions, export subsidies, dumping of surplus commodities by the OECD countries, pricing and regulatory policies that commonly distort incentives in developing countries, and subsidies in agricultural inputs. Resolving agricultural policy problems requires withdrawing most government intervention from agricultural markets and recognizing economic rights such as allowing: a) farmers to produce whatever commodities they feel will profit them best; b) traders to move goods in expectation of profits; c) consumers to buy foods at the lowest prices; and d) taxpayers to keep their hard-earned income safe from plunder from farm welfare programs.