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Agricultural Subsidies No. 499

Adopted 2003
Amended 2005
Amended 2006
Reaffirmed 2007

ADA recognizes that the respective agricultural policies of the United States and the European Union are detrimental to the economic development of poor nations. Agricultural subsidies encourage overproduction and lead to prices below the cost of production, creating worldwide price distortions of agricultural markets. The dumping of surplus agricultural commodities on developing countries undermines the livelihood of local farmers, who cannot match such low prices. These price distortions are likewise detrimental to independent farmers in the United States. Economic studies show that large agribusinesses, rather than independent farmers, receive a significant share of total subsidy spending. Local farmers in developing countries, and small farmers in the U.S., similarly are being forced out of agricultural markets. Recently, the World Trade Organization upheld a decision that U.S. cotton subsidies are illegal, since dumping of the over-produced and under-priced cotton violates rules of the World Trade Organization. We recommend that the US and European Union take steps to revise their agricultural subsidy policies as necessary steps toward achieving a global balance of supply and demand for agricultural products; fair prices for farmers; and a safe, healthy food supply for consumers in both developed and developing countries.

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No. 499

Foreign and Military Commission