Aid raises food prices

Posted on September 10, 2007 | Type: Op-Ed
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David Bassingthwaite's Aug. 28 letter to the editor addressing Tom Patterson's Aug. 20 column is a bit off the mark. The agricultural industry in the U.S. is not our best performer. If it were, it wouldn't need taxpayer money to keep it profitable. Bassingthwaite compared our food prices with European nations, which subsidize their farming industries at rates exceedingly higher than our own. The European Union subsidizes farming so much that European cows are subsidized to the tune of $2 a day, which happens to be double the daily income of almost 1 billion people on the planet. Celebrating cheaper U.S. food prices relative to the most expensive food prices in the world is like coming in next to last in a race and thinking we cant do any better.

Agricultural subsidies increase the price of food products, not decrease them. The government can pay farmers to grow less, restricting the supply of food. Low supply with high demand leads to higher prices. Second, the government can pay farmers price supports if the market price for their crop falls too low. When we subsidize U.S. farmers who cant compete with lower prices from other countries, we end up putting the farmers in those nations out of business. With fewer farmers, there is less competition and it is competition between farmers which helps keep prices low.

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