Editing Agricultural policy (section)

=== Dumping of agricultural surpluses===
In international trade parlance, when a company from country A sells a commodity below the cost of production into country B, this is called "[[Dumping (pricing policy)|dumping]]". A number of countries that are signatories to multilateral trade agreements have provisions that prohibit this practice.
When rich countries subsidize domestic production, the excess output is often given to the developing world as foreign aid. This process eliminates the domestic market for agricultural products in the developing world because the products can be obtained for free from western aid agencies. In developing nations where these effects are most severe, small farmers could no longer afford basic inputs and were forced to sell their land.

"Consider a farmer in [[Ghana]] who used to be able to make a living growing rice. Several years ago, Ghana was able to feed and export their surplus. Now, it imports rice. From where? Developed countries. Why? Because it's cheaper. Even if it costs the rice producer in the developed world much more to produce the rice, he doesn't have to make a profit from his crop. The government pays him to grow it, so he can sell it more cheaply to Ghana than the farmer in Ghana can. And that farmer in Ghana? He can't feed his family anymore." ([[Lyle Vanclief]], former Canadian Minister of Agriculture [1997-2003])

According to the [[Institute for Agriculture and Trade Policy]], corn, soybeans, cotton, wheat and rice are sold below the cost of production, or dumped. Dumping rates are approximately forty percent for wheat, between twenty-five and thirty percent for corn (maize), approximately thirty percent for soybeans, fifty-seven percent for cotton, and approximately twenty percent for rice. For example, wheat is sold for forty percent below cost.

According to Oxfam, "If developed nations eliminated subsidy programs, the export value of agriculture in lesser developed nations would increase by 24 %, plus a further 5.5 % from tariff equilibrium. ... exporters can offer US surpluses for sale at prices around half the cost of production; destroying local agriculture and creating a [[captive market]] in the process." Free trade advocates desire the elimination of all market distorting mechanisms (subsidies, tariffs, regulations) and argue that, as with free trade in all areas, this will result in aggregate benefit for all. This position is particularly popular in competitive agricultural exporting nations in both the developed and developing world, some of whom have banded together in the [[Cairns Group]] lobby. Canada's Department of Agriculture estimates that developing nations would benefit by about $4 billion annually if subsidies in the developed world were halved.