Monday, December 04, 2006

Imports Spurring Push to Subsidize Produce - New York Times

“The Chinese garlic totally caught us off-guard and knocked us down,” Mr. Mantelli said recently as he checked on newly planted garlic bulbs. “I think our industry has hit rock bottom. Maybe now we can figure out how to make it a level playing field.”

So Mr. Mantelli has joined the coalition of about 75 growers of specialty crops who have united to grab a much bigger slice of the federal subsidy pie.

I certainly do not want to trivialize the challenges Mr. Mantelli and other farmers face. Farmers, and the goods they provide, are an important part of the past and present fabric of our society. That said, I'm afraid I can't agree with Mr. Mantelli that subsidies will help "level the playing field" verses Chinese agricultural imports. I say this on the basis that subsidies are inherently market-distorting and therefore do the exact opposite of leveling playing fields.

“Things that help farmers band together and compete are not inherently protectionist or harmful,” Professor Morici said. “It is not an unreasonable thing for a fragmented industry to ask the government for assistance to make the virtues of their industry better known.”

Hard to argue with this point, I guess I just don't understand why it has to come in the form of government subsidies. Farmers highlighting the virtues of their industry is a great way to deal with competition, both foreign and domestic, but do they need the input of government to do this?

True, the agricultural industry in China is heavily subsidized and they have an artificially low currency. But subsidies battling subsidies will only distort the market further and prevent real innovation from taking place.

Imports Spurring Push to Subsidize Produce - New York Times

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