2017: A Year of Foreign Ag Subsidies

From South America to Asia, foreign nations doubled-down on subsidies and market manipulation in 2017 to give their agriculture sectors a huge leg up on the competition. Take China, for example.  The Chinese government announced the most ironic subsidy of the year in June, which was neatly summed up by Reuters:China will spend almost twice as much this year on subsidies to encourage farmers in the northeast to reduce corn plantings as it intensifies its push to rebalance grain stocks.The country will issue 2.56 billion yuan ($374.95 million) in funds [on top of other handouts] to pay farmers subsidies to rotate their corn plantings with other crops every other year as well as to leave some land fallow…China started giving out the subsidies last year under an overhaul of its grains policy under which it had paid farmers artificially high prices for their corn.That policy left it with a stockpile of 250 million tonnes of corn, more than one year's worth of consumption.In other words, China issued big subsidies to fix surplus problems created by China’s big subsidies.  At the end of November, Brazil kicked off a new ethanol program designed to increase ethanol demand and boost domestic sugar prices.  Thailand continued to wrestle with the fallout of a failed scheme to corner the global rice market.  And India waived billions in farm debt, increased tariffs, and announced a slew of other programs to aid its country’s agriculture sector – goodies that are continuing with new subsidy announcements in 2018.In fact, the Organization for Economic Co-operation and Development (OECD), which tracks global subsidization in 52 countries, reports subsidies totaled $519 billion a year between 2014 and 2016.