CNN reports on another step in the direction of free markets:
HONG KONG, China (CNN) – Ministers from 149 states have saved long-running global trade talks from collapse with an interim deal to end farm export subsidies by 2013 and open up markets in wealthier countries to the world’s poorest nations … The draft, which appears to be a compromise, calles for subsidies to be progressively ceased. But ministers said it would keep alive plans for a wider pact freeing up global trade, known as the Doha round, that could boost the world economy and lift millions out of poverty.
While I applaud the call for a reduction in agricultural subsidies, I also seem to recall a paper by Nava Ashraf, Margaret McMillan, and Alix Peterson Zwane with the following abstract:
Using non-parametric analysis we establish the fact that the majority of poor countries are currently net food importers and have been for the past thirty years. Using a a cross-country regression framework we measure the overall impact of agricultural support policies in rich countries on average income per capita in poor countries. We find some evidence that OECD support polices are positively correlated with average incomes in food-importing countries and negatively correlated with average incomes in food-exporting countries.
Eduardo Porter recalls the same paper and writes:
In a paper published in April, three economists – Nava Ashraf from Harvard, Margaret McMillan from Tufts, and Alix Peterson Zwane from the University of California, Berkeley, concluded that agricultural supports boosted the per capita income of two-thirds of 77 developing nations, including most of the poorest countries, like Burundi and Zambia.
Hat tip to Tyler Cowen who also understands that not everyone benefits from free trade.