Grain drain. The hidden cost of U.S. rice subsidies
2006
D. Griswold
Rice is the world’s most important, most protected and most subsidised food commodity. This study describes the distortions in global rice markets caused by interventions such as the U.S. rice programme. The U.S. government supports domestic rice production through tariffs on imported rice and direct taxpayer subsidies. <br /><br />There is no evidence that government support has brought about a self-sustaining U.S. rice sector while U.S. citizens incur the following costs: a rice price up to four times as high as the world price a level of rice production higher than what the market calls for, slowing down U.S. growth <br />the cost of subsidies The author points to the consequences of the U.S. rice programme for producers in poorer countries: due to barriers, markets are slim and volatile and U.S. policy drives down world market prices for rice. This harms rice producers elsewhere and undermines the U.S.' standing in the world. Suggested reforms to the rice programme that would serve the U.S.' broader national interests include: repeal all trade barriers against imported rice eliminate the market loan programme phase out or buy out the other subsidy programmes The author expects that a smaller but more competitive U.S. rice sector could be viable without federal support. <br />
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