After two boom years, The Wall Street Journal reports that the U.S. agricultural sector is expecting this year's profits to be below the 10-year average.
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U.S. Agri-Business and Its Competitors
It seems that a contributing reason as to why agriculture in the U.S. has been one of the last few industries to be "hit" by the recession is the fact that it is and has been for some time, highly subsidized by the U.S. Government. This helps with a certain amount of financial security while functioning in a state of national and global economic recession.
This subsidization of U.S. Agri-Business has aided in creating a huge advantage when competing in the global market. However, while American Farmers has had such a significant gain in this area, many agricultural sectors in other economies around the world have not. Those countries that, at one point would have imported U.S. goods into their country, may now consider turning to more local farmers (who up until this point have been affected very negatively due to trade agreements that aim to open up trade all barriers).
This creates protectionism which is a big no-no in a liberalized, free market society. If this is indeed the case then this would have great benefits for poor peasant farmers in their home country (i.e. Mexico, Jamaica, etc) but U.S. Agri-Business will continue to suffer greatly.
This creates protectionism
This creates protectionism which is a big no-no in a liberalized, free market society. If this is indeed the case, google more info.
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