Prime Minister John Key used his opening speech to the APEC forum in Vladivostok to call for an end to agricultural subsidies:
. . . TPP would not be a substitute for World Trade Organisation trade talks, he said. The reality was less-developed countries often weren’t included in trade negotiations like TPP, he said.
And while agreements like TPP dealt with barriers to trade and investment, they did not get to the heart of subsidies.
Key said World Trade Organisation negotiations were the key to tackling high domestic subsidies in many economies’ agricultural sectors. He noted the New Zealand experience through the 1980s and 90s following the removal of subsidies there.
“While there is some pain…farmers responded very quickly to the signals – cut costs, increased productivity,” Key said.
“This level of subsidisation is no longer affordable nor sustainable,” he said.
“Now is the time for leaders around the world to be bold,” Key said, calling on them to eradicate subsidies, and start down the road of deficit reduction. . .
The mid to late 80s were very tough years for farming here. But I don’t know a single farmer who would go back to subsidies and farmers we met in England and Europe in June were looking forward to the end of subsidies there too.
They said they’d rather be answerable to markets than at the whim of politicians and bureaucrats.
Agricultural subsidies distort supply and demand, add to costs for taxpayers and consumers and promote inefficiency.
Getting rid of subsidies will open up trading opportunities to the benefit of producers and consumers.