One of the greatest barriers to free trade is agricultural subsidies since they are politically venomous to remove due to the perception that their removal could leave many farmers with lower incomes, lead to a general increase in domestic food prices and endanger the nationalistic conception of food security that is predicated upon the perpetual threat of war (which simultaneously reduces the potential cost of war and makes it more likely). Agricultural subsidies and agricultural trade are routinely amongst the most contentious talking points in ‘trade deals’. However, agricultural subsidies can be feasibly phased out if land-use restrictions are lifted; indeed, this would benefit all the parties involved.
Land-use liberalisations can lead to alternative sources of income and increase wealth, infrastructure, housing, education, healthcare and tourism
If land-use restrictions are lifted or at least significantly liberalised, there would be a whole host of alternative sources of income opened up for farmers. Firstly, the very act of lifting restrictions on land-use means that more can be done legally with that same land and, therefore, farmers (assuming they own the land) will see an immediate, significant increase in wealth.
Secondly, lifting restrictions means that the land can be used for many other purposes and the farmers can either lease it out or sell it for those purposes. These purposes could range from transport and supply-chain infrastructure development to education and healthcare. Given that Britain and many other countries are currently facing housing and healthcare crises, land-use liberalisations could alleviate these crises and be beneficial for all involved.
Finally, farmers could also use their land for tourism purposes and this alternative income source would act as a financial incentive for environmental preservation, conservation and sustainability.
As such, land-use restrictions limit the sources of income that farmers can have and, therefore, make them vulnerable to the benevolence of the state (whose favour can wax and wane over time) as well as unable to enjoy diversified streams of income to the same degree that many urban workers do.
Land-use restrictions and agricultural subsidies increase the probability of war
It is often argued that agricultural subsidies are required for ‘food security’ and at the root of this argument lies the assumption that there is a possibility of war and this must be planned for. Whilst this is a well-intentioned precautionary measure, when countries achieve ‘national food security’ they actually reduce the costs associated with going to war.
When tensions escalate internationally, governments who are more certain of national food security see the probability of ‘victory’ as being higher and the costs of engaging in war as being lower than if there were no national food security. Furthermore, by restricting land use for particular purposes, it can actually run counter to achieving the goal of national food security (this will be further elaborated upon under the next sub-heading).
Land-use restrictions and agricultural subsidies restrict innovation in food tech and agriculture
When land is set aside for purely agricultural purposes and income is derived from subsidies, this reduces the pressure and incentive required to innovate and reduce production costs. To begin with, although there would be a significant increase in the price of agricultural products in the absence of subsidies, this would incentivise producers to supply more to the marketplace.
However, with limited land, this would also encourage investment into technologies that increase the yield for a given amount of land, techniques that improve production speed, the methods used for farming (possibly even making the use of traditional agricultural land redundant and allowing for a more substantial generation of ‘urban farmers’) and financially enable more humane methods (such as cultured meat) to become ubiquitous.
As such, countries are actually subsidising short-term food security whilst preventing the possibility of long-term food security.
Land-use restrictions and agricultural subsidies lead to poverty worldwide
Finally, agricultural subsidies in conjunction with land-use restrictions result in a particularly potent cocktail that reinforces poverty. In developed countries, land-use restrictions constrain the sources of income a farmer can receive and the subsidies make them reliant upon their respective governments. Subsidies also serve to artificially suppress the price of agricultural products and, thereby, deprive income from poorer farmers from developing countries.
Often, rural communities worldwide tend to suffer from lower incomes within their own countries. Nevertheless, the policy of national subsidies and land-use restrictions encourages a sense of nationalistic hostility and animosity that makes it more difficult for farmers across countries to cooperate and mutually benefit from the possibilities of both alternative sources of income and higher amounts of income.
Concluding Remarks
Ultimately, to enable the phasing out of agricultural subsidies, there has to be a significant liberalisation of land-use restrictions (globally, ideally). This would increase farmers’ incomes and wealth, improve infrastructure for various social welfare purposes (e.g education, healthcare, and transport), reduce the probability of war, and finally encourage technological progress and innovation in agriculture. All in all, it cannot be understated just how immensely this would benefit all parties involved.
