Ask an American living in the city about U.S. agricultural subsidies and he or she is sure to go on and on and about how U.S. farm policy is destroying the livelihoods of poor farmers around the world.

But a report from Texas Tech University’s Cotton Economic Research Institute shows that agricultural subsidies are more the norm rather than the exception for 21 developing and developed countries studied. The study focused on seven commodities: corn, cotton, rice, sorghum, soybeans, sugar and wheat.
Here are highlights from selected countries in the study which was released in April:

Australia – Australia removed most forms of commodity-specific agricultural assistance in the mid-1980s, retaining primarily safety net programs to assist producers in times of financial difficulty. Australia does not use longer-term income support payments.

Brazil – The removal of taxes, tariffs, and other trade restrictions in the early 1990s fueled rapid growth in the Brazilian agricultural sector. Agriculture and allied industries account for 40% of Brazilian total exports and virtually all of a $34 billion trade surplus. Much of Brazil’s support is in the form of subsidized credit.

The basic minimum support price for cotton lint is 79¢/lb., while the WTO-bound import tariff for cotton is 35%.

The Brazilian government purchases and sells cotton as part of its effort to control prices. When prices were low in the second half of 2005, the government purchased 4,500 metric tons (mt) of cotton, increasing government stocks to the highest level in two years. In 2007, when prices rose above the minimum guaranteed price, Brazil sold nearly two-thirds of its stocks and purchased only about 1,000 mt of cotton later in the year.

China – Currently, Chinese food security policy is primarily focused on maintaining self-sufficiency in rice, wheat, corn and tubers. Soybeans and cotton are no longer part of this group.

China plans to maintain its grain self-sufficiency rate at above 95% through 2020. This objective is implemented using direct payments, seed subsidies, tariff rate quotas and price support programs (for rice and wheat), subsidies for farm machinery and subsidies for farm use of fuel and fertilizers. In recent years, these programs have expanded and the costs nearly doubled from 2007 to 2008 going from $7.6 billion to $15.1 billion.

Egypt – While fertilizer and pesticide subsidy programs were phased out in 2003, assistance to producers in the form of soft loans, free irrigation and subsidized electricity are maintained.

Direct income support is provided to producers. The government has a subsidy program directed to textile mills to purchase cotton for 53¢/lb. Egypt has removed all export restrictions on its cotton. Egypt bans imports from countries affected by boll weevil infestation. The U.S. is now treated as boll weevil-free by Egypt because risks are considered minimal due to the ginning and baling process.
The government provides input assistance to producers to defray the costs of land preparation, pesticides and planting seeds.

EU-27 – Support mechanisms include a mixture of price supports and supply controls. Farmers remove a percentage of their arable cropland from production in order to receive direct (coupled) payments. The direct subsidy for durum wheat is roughly $149/acre.

EU grains receive export subsidies to be price competitive on the world market.
Out-of-quota tariff rates are 86.9% for durum wheat, 71.5% for corn, and 72.4% for grain sorghum.

Subsidized export limits are 530 million bushels for wheat and 427 million bushels for coarse grains.

For cotton, a decoupled payment of at least 65% of the 2000-2002 historical payment began in 2006. A coupled payment of up to 35% is allowed as an area-based subsidy with a maximum base of about 1 million acres, split between Greece, Portugal and Spain.

India – A significant portion of government funds have been allocated to subsidizing production inputs such as fertilizers, seed, power and irrigation. The fertilizer subsidy alone increased from $1.25 billion in 1992-1993 to $2.88 billion in 2001-2002.

The government also buys agricultural products from farmers at announced support prices. The government has maintained these domestic policies with a series of restrictive trade policies such as import licensing, tariffs, quotas and state trading. However, the Indian government has been removing many licensing and quota restrictions and is replacing them with high tariffs.

Indonesia – The budgetary allocation for fertilizer subsidies was also increased from $1.5 billion in 2008 to $2.1 billion in 2009. Funding for seed subsidies increased from $3.4 billion in 2008 to $3.6 billion in 2009. Funding for infrastructure development increased from $9.2 billion in 2008 to $10.2 billion in 2009.

Japan – In 2005, the Ministry of Agriculture, Forestry and Fisheries announced a new farm program that replaces commodity-based farm payments with targeted direct payments. Payments are made to farmers to shift land from rice to wheat and soybean production. The government annually forecasts domestic rice consumption, estimates the land needed to produce that quantity and allocates the desired reductions. Producers who conform to the acreage reductions are eligible for subsidy payments. Japan announced plans to phase out production controls by 2008.