QUESTION 1 IF AGRICULTURAL TARIFFS AND SUBSIDIES TO PRODUCERS WERE REMOVED OVERNIGHT, WHAT WOULD THE IMPACT BE IN THE AVERAGE CONSUMER IN DEVELOPED NATIONS SUCH AS THE UNITED STATES AND THE EU COUNTRIES? WHAT WOULD BE THE IMPACT ON THE AVERAGE FARMER?
Lowering the tariffs and getting rid of subsidies would allow the average consumers to save. The prices for these products would be cheaper and the taxes paid would eliminate because there would no longer be any subsidies to pay for. On the other had this would be a negative for the average farmers in these nations. There would no longer be a surplus of goods that could be sold to monopolize the market. Farmers would no longer benefit from the subsidies they received all profits would be based on production. Lower commodity prices in developing nations would cause farmers to lose revenue because in order to make a profit they would have to raise prices causing them to not be competitive within their market.
QUESTION 2 WHICH DO YOU THINK WOULD HELP THE CITIZENS OF THE WORLD’S POOREST NATIONS MORE, INCREASING FOREIGN AID OR REMOVING ALL AGRICULTURAL TARIFFS AND SUBSIDES?
Foreign aid comes with strings attached and it does not come without a cost. Foreign aid only seems to balance out the “goodwill” of developed countries. As stated in the case the foreign aid that these developing nations receive from developed countries is less than what they are losing if allowed to sell the commodities that the posses in their countries. Clearly these developing countries would benefit from removing all agricultural tariffs and subsides.
QUESTION 3 WHY DO YOU THINK GOVERNMENTS IN DEVELOPED NATIONS CONTINUE TO LAVISH EXTENSIVE SUPPORT ON AGRICULTURAL PRODUCERS, EVEN THOUGH THOSE PRODUCERS CONSTITUTE A VERY SMALL SEGMENT OF THE POPULATION?