World cannot afford farming subsidies

Agricultural subsidies around the world are a waste of hundreds of billions of dollars and unaffordable in the wake of the global financial crisis, New Zealand's prime minister said Friday. Speaking at a business forum in Vladivostok ahead of the Asia Pacific Economic Cooperation leaders' summit, John Key said cutting farming subsidies -- which New Zealand eliminated in the 1980s -- would promote economic growth. "Imagine the benefits of freeing up the hundreds of billions of dollars of taxpayer-funded subsidies which are poured into agriculture, fisheries and a number of other industries," Key said. "With Japan, the United States, and the European Union all facing huge challenges to reduce their fiscal deficits and get public sector debt under control, what is plainly evident is that this level of subsidisation is no longer affordable or sustainable." Key pointed to the example of New Zealand, which he said had the only "truly unsubsidised agricultural sector in the world". "Unwinding subsidies is not easy, we in New Zealand know that from our own experience," he said. "(But) farmers responded very quickly to the signals, they cut costs, they improved productivity, and they responded to market demand." He said his country's agriculture and wine sectors now had "arguably the best yields and highest productivity" in the world.