agricultural subsidies: Attempts at Ending Subsidies
Once introduced, subsidies to maintain prices have proved extremely difficult to end. In France, farmers have vigorously protested decreases in subsidies that have made them the second largest food exporter after the United States. In 1996, the U.S. Congress, despite its long history of farm price supports, passed the Freedom to Farm Act, which eliminated agricultural subsidies in favor of fixed payments to farmers. The legislation failed to decrease payments to farmers, however, and by 2000 aid to farmers (including so-called emergency payments) had reached more than $22 billion, three times the 1996 level. A new federal farm bill in 2002 abandoned the 1996 goal of reducing farm payments, increasing base program expenditures by 80%. Agricultural subsidies in the United States, the European Community (now the European Union; EU),and Japan were issues of contentious debate in the Uruguay (1986–94) round of international trade negotiations under the General Agreement on Tariffs and Trade (GATT) and remain so in the World Trade Organization (WTO). In 2005, for example, the WTO issued rulings against U.S. cotton and EU sugar exports in which it said that subsidies distorted world trade.
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