X-Raying the Agricultural Subsidies

Case Analysis 3

California Intercontinental University California

Global Economy – ECO 615: X-raying the Agricultural Subsidies

Aniuha, Rita Ndidiamaka

Dr Al Infande

April, 2014

2. INTRODUCTION

2. a. Thesis Statement:

Oftentimes different sectors of the economy are faced with different challenges. The agricultural sector is no exception as members of the WTO are often at logger heads over each other; the developing countries whose almost total dependence is on agriculture and agricultural products versus the industrial countries that convert its produce. How to settle all these problems and ensure smooth flow among the developing and industrial countries is a major concern to be tackled. This when done well will surely lead to a better and more viable economy.

2. b. Purpose of Study:

The purpose of this paper is to provide an overview of the case in question by summarizing the key points. It will also discuss how the Uruguay Round and the Doha Development Agenda impact agricultural subsidies. It will also discuss the findings in Table 7.3 and try to address the findings in a presentation form.

2. c. Overview of the Paper:

Agricultural subsidies are considered to be the most effective mechanism for accelerating the growth of agricultural sector. This is usually paid to the farmers and the agricultural businesses to supplement their income, manage the supply of agricultural commodities and influence the cost and supply of such commodities in international markets. They are intended to reduce production costs by providing organic fertilizers, seeds; pesticides etc at highly reduced prices than the market price to enable the agriculturists get enough quantities for their farm. WTO agriculture was among the most distorted sectors in international trade. The principal source of these distortions was the co-existence of very high level of domestic and export subsidies and almost impenetrable import barriers for temperate zone agricultural goods in developed...