In a comment to the thread "The Problem With the Central Valley" I asked LTG, in the interest of an exchange of ideas, to list the best reasons he can think of for supporting ag subsidies broadly defined. I thought I would get the ball rolling with what I understand to be the biggest problems of ag subsidies from the point of view of the developing world. I'm not an expert on the political economy of agriculture but I have a kind of hobbyists interest in it and I'd like to think I've got a half way decent understand of the basic political and economic issues at play.
1) Dumping and import restrictions: When developed countries subsidize and otherwise protect their own ag sectors it directly hurts farmers in the developing world in at least two ways. First, it artificially lowers the costs of ag products from big farms in the developed world which gives them an unfair advantage in the world markets - this is dumping. Second, it may actually lock out imports from developing country producers, cutting them off from potentially lucrative markets.
2) Debt: Often, the governments in developing countries respond to the ag subsidies in the rich countries by instituting their own subsidies. This was a popular strategy in the 1960s and 1970s. The problem is that subsidies cost a lot of money. Developed countries can pay for them through tax revenue but many developing countries had to borrow the extra cash. When interest rates spiked in the late 1970s and early 1980s, these countries found themselves in debt crises. Many governments were destabilized by this.
3) Neo-feudalization: In his classic book about the political economy of agriculture in Africa, Robert Bates described how government agriculture projects designed to encourage commercial agriculture through subsidies and price controls, led to the emergence of rural elites that had not existed before. These are not the old tribal and clan elites but rather commercialized land owners with vested interests in perpetuating the costly subsidy programs. The problem here is that many theorists of democratization - see especially Barrington Moore - have argued that the presence of an entrenched agrarian elite in rural areas can hinder democratization.
4) The Incentive to industrialize: If developing countries cannot succeed trading agriculture products that fit their comparative advantage, they turn to industrialization as a means to successfully engage with the globalizing market. The problem is that since many of these countries may not have comparative advantages and factor endowments that favor export oriented industrialization, they have to subsidize the new industries. This costs more money and brings on more debt.
5) Migration: As ag subsidies in the rich countries undermine the profitability of farms in developing countries, the millions of rural poor who had eeked out a living farming are forced off their farms. They migrate to cities within their own countries leading to more pollution and urban overcrowding and poverty. They also may migrate to adjacent rich countries. This is what we see in the US. Many of the illegal immigrants that come to the US from Mexico and Central America are people who were forced off their farms back home and come to the US looking for work - often on our own subsidized farms.
There are more reasons but this should get us started. Enjoy!