That's apparently the problem, according to a NYT article repeating the complaints of Kamal Nath, Indian's commerce minister. According to Mr. Nath, U.S. and European farming subsidies "undercut agricultural production in fertile areas of Africa." So now we are back in the world in which food prices are too low. That's really something. We had all these articles about how food prices were too high leading to hunger and starvation and now we find that the real problem is that they are too low. Of course the problem is that food prices are too high, causing people to go hungry. The truth is that the U.S. and European subsidies that cause the Post, the NYT, the World Bank and many NGOs to get apoplectic have the effect of lowering world food prices. That means that fewer people go hungry than would be the case without these subsidies. This isn't rocket science, it's almost definitional. The U.S. and European effectively pay their farmers to keep farming, thereby producing more food than otherwise would be produced. This may have negative consequences for farmers elsewhere in the world, but it does mean that supply is greater and prices are lower than they would be in the absence of the subsidies. These countries are not granting the subsidies to feed the world's poor and there are undoubtedly better ways to accomplish this task. Nonetheless, in the battle against world hunger, these subsidies are a net positive. When the foes of subsidies blame them for world hunger, they are not being honest. Their complaints against the subsidies obviously have some other basis.
--Dean Baker
