Wednesday, December 29, 2010

The farm subsidy plank in our eye.

This is a great new paper about the effect of the Malawian fertilizer subsidy program on food security and the Malawian economy. h/t to Owen's blog.
The opposition to Malawian fertilizer subsidies has always been deeply hypocritical.
I agree that in a perfect world fertilizer subsidies do not make sense. But so long as one country is willing to subsidize its farmers every other country will also do so. Furthermore developed countries that might be able to afford giving less farm subsidies without the immediate specter of famine looming on their doorstep really need to take the lead on this issue if they are going to have any credibility when they ask developing countries to end their own subsidy programs.
The goal of agricultural development projects probably should not be to ensure that smallholders are able to make more money and be more productive. There is no nation on the planet which has a large middle class of smallhold farmers who are able to send their kids to college and retire at 65. Rather the priority should be food security AND economic development projects that get people off their small plots and into more productive work either through education or industry.