Price Supports and Poverty
Agricultural price supports in industrialized countries often are vilified for unfairly pricing developing countries out of global markets. However, a recent study co-authored by Cooperative Extension Specialist Alix Zwane and published by the National Bureau of Economic Research found that such subsidies don’t necessarily worsen poverty in developing nations, and may, in fact, help. Why? Because many of the world’s poorest countries are net importers of farm products, who benefit from the lower costs associated with subsidies.
It’s a complicated issue, and Zwane is quick to point out that her findings “might best be taken as a note of caution” for those who advocate eliminating subsidies as a means to curb poverty in developing economies.