Wednesday, October 28, 2009

European sugar subsidies

Europe's Common Agriculture Policy (CAP), which lavishes mroe than 50 bn euros in subsidies, has for long been the embodiment of market distortions that marks much of government support for agriculture. Such subsidies, with its resultant market distortions, is glaringly evident in the case of sugar, where European domestic consumers have been paying roughly double the world market rate for almost two decades. The graphics below captures some of the distortions.

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