IF ONLY THINGS HAPPENED JUST BECAUSE EVERYONE WOULD BENEFIT:

Rob Portman, Take A Bow (Paul Maidment, 10.11.05, Forbes)

Farmers in rich countries get $1 billion per day in subsidies. To be fair, we've rounded up the numbers, counted agribusinesses and small farmers, and defined subsidies broadly to include tariffs, export credits and other supports. But, give a million or two a day, the order of magnitude is right.

By that measure, agriculture is the most protected industry. And that is the single biggest reason that the current round of world trade talks under the World Trade Organization (WTO) is stalled. Not surprisingly, farmers don't want to give up that sort of money.

Farmers and agribusinesses such as Archer Daniels Midland (nyse: ADM - news - people ), ConAgra Foods (nyse: CAG - news - people ), General Mills (nyse: GIS - news - people ) and the privately owned Cargill, which in the U.S. get 80% of farm subsidies, have tremendous political clout--as do their counterparts in Europe and Japan--way beyond their numbers or economic size. That has ensured that the harvest of dollars, euro or yen remains bountiful.

There are many social reasons, legitimately chosen, that countries subsidize agriculture, from food security to a desire to protect traditional rural ways of life. In Japan, no more so than in America or France, farm subsidies, to their defenders, are as much about national identity as economics.

But they are also distorting to trade, as they make nonsense of market prices--so much so in some cases that they have spawned their own jargon among trade officials: amber-box subsidies for the most distorting; blue box for less distorting.

In the broad scheme of things, the potential global gains from trade in terms of economic growth, and thus wealth and job creation around the world, far outweigh the cost of the subsidies. In the particular case of farm trade, a diminution of farm subsidies in the rich countries would help raise some of the poorest in developing nations from poverty by providing a level playing field on which to compete and provide access to profitable export markets.

While Americans are generally less threatened by the idea of free market economics than most, it's instructive to consider that if a mainstream political figure had run a third party candidacy in 2004 on just three issues--protectionism, isolationism, and anti-immigration--he'd have run no worse than 2nd in the popular vote.

Posted by Orrin Judd at October 12, 2005 2:20 PM