meaning of "farmers who receive state subsidies" in context

Question

Western involvement in Africa should go far beyond the purchase of oil and minerals, and requires sacrifices from all wealthy countries, Western and non-Western. The matter of agricultural subsidies ranks high in this category. The majority of Africans today make their living as commercial farmers, and for them, any unfair competition on free markets has devastating results. African farmers earn very low per-hour wages, and they are able to market their tea, cotton, cacao, and bananas at very low prices. But, they cannot compete with farmers who receive state subsidies to plant, harvest, export, and market their produce. It is up to the rich countries to gradually stop these subsidies-if they really believe their own words about free trade-and to give African farmers their chance.

Q) Just with the given passage above, it seems impossible to figure out whether "farmers who receive state subsidies ~" in the passage refers to those in rich countries or those in Africa but receives subsidies from rich countries (either African or rich state nationals). The author talks about a problem arisen by agricultural subsidies which, in fact, lead to unfair competition on free market. But whether the "free market" refers to world market or domestic market in African states is not clear to me. For this, it seems impossible to know whether farmers who create an unfair competition by receiving subsidies are those from rich countries who are now in Africa, those in rich countries, or African farmers in Africa who receives government subsides originated from rich countries. Am I missing something? Or it's the passage?

Depending on which one is correct, I guess the whole point of the passage changes because the problem the author talks about can be understood in two different levels: the problem in the level of world trade (world market) and the problem in the level of domestic market that leads to poverty in Africa.

Is my problematique valid? Thanks in advance.

Answer 1

In your question, you wrote that the group described by the phrase "farmers who receive state subsidies" could be one of these options.

1. (Farmers) from rich countries who are now in Africa.
2. (Farmers) in rich countries.
3. African farmers in Africa who receives government subsides originated from rich countries.

Due to my lack of economic skill, I cannot offer other possible candidates, therefore I will be working with the options presented above.

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This is my interpretation of the passage:

Firstly, "It is up to the rich countries to gradually stop these subsidies..." implies that the foreign governments are giving the subsidies.

Then, I looked into the definition of state subsidies in the sentence:

"... farmers who receive state subsidies to plant, harvest, export, and market their produce."

I believe that in this case, "state subsidies" implies that the farmers are being subsidised by their own country. A search on Investopedia gives:

• A subsidy is a benefit given by the government to groups or individuals, usually in the form of a cash payment or a tax reduction.
• A subsidy is generally used as a form of support for particular portions of a nation’s economy.

All definitions of "subsidy" imply that the subsidy is given by the government of a country to a group or industry within the same country. It would also not make any sense logically for a country to support the economy of other countries by subsidising industries of another country.

Using this definition, we can rule out options 1 and 3, as a "rich government" would not subsidise an overseas business, even if the businesspeople are citizens of the "rich country".

Therefore, I believe that the subject of the phrase "farmers who receive state subsidies" refers to the farmers in rich countries, which then implies that the problem in the world market.