It is policies in developed countries that have produced the bigger, more pervasive, more durable, and worsening “price twists” against developing countries’ farm prices, thereby encouraging developing country farmers to discount the future capacity of their resources to sustain output. Farm policy in the European Community, and for some products in the United States (sugar, tobacco, cotton) and Japan (rice), lowers the trend line of world farm output prices by (1) stimulating overproduction; (2) subsidizing huge stock overhangs that depress prices further, and arguably by subsidizing exports as well; and (3) greatly stimulating developed country farmers’ demand for research, which generates a pipeline of technical progress that leads to further incentives to overproduce. Finally, developing country governments have often ill-advisedly intensified this price decline via trade regimes, parastatal monopolies of farm inputs or monopsonies of farm outputs, and so forth.

In its evaluation of the impact of developed country policies on resource degradation in developing country rural areas, the text

Item 4 - admits that developing country governments have intensified the price declining trend.