Do U.S. ag subsidies really increase production?

Agricultural subsidies in the developed world are the perennial bogeyman of world trade negotiations. Michael Pollan also blames them for America's nutritional crisis, because they make food too cheap.

In reviewing Pollan's recent NYT op ed, Michael Roberts links backs to several interesting posts on why he doesn't think ag subsidies (aside from ethanol mandates) increases U.S. agricultural production. This is a pretty interesting argument, as it runs counter to the obvious intuition on subsidies.

His main point is that agricultural production appears to be driven by conservation policy and payments, not subsidies. I don't quite understand how conservation acreage is determined from his post, so I don't yet entirely understand his argument.

The other interesting point is that not all subsidies are volume-driven (so these obviously wouldn't effect production).

What would be the implications for world trade if this weren't true? Well, it wouldn't make rich-world farmers any more willing to give up their subsidies. But it might change our beliefs about the trade gains to be realized if the subsidies are eliminated (the standard argument is that African farmers would receive higher prices for their products if it weren't for these subsidies). Unfortunately, that argument alone is unlikely to effect any major breakthroughs at the international negotiating table.

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