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Reform ag subsidies, but don't plow them under

Why the late, lamented Doha round wasn't really the answer for ag policy.

Posted by Tom Philpott at 1:46 PM on 07 Aug 2006

Read more about: food | agriculture | ag policy | ag subsidies

Harvesting a bit of vintage Reagan-era rhetoric, L.A. Times columnist Jonah Goldberg recently denounced what he called "welfare queens on tractors."

The right-winger's target was clear: The U.S. farm subsidy program, which doles out around $14.5 billion per year (depending on market fluctuations), mainly to large producers of corn, cotton, wheat, soybeans, and rice. As Congress opens debate on the 2007 Farm Bill -- the omnibus five-year legislation that governs agricultural support -- the subsidy program has drawn a chorus of critics.

Goldberg gets it about right when he lists the program's opponents: "Right-wing economists, left-wing environmentalists and almost anybody in-between who doesn't receive a check from the Department of Agriculture or depend on a political donation."

To be sure, the subsidy-haters have a point. A vast literature shows that the real beneficiaries of U.S. ag subsidies aren't farmers at all, but rather agribusiness giants. Direct government payments encourage farmers to produce as much as possible, which pushes down the prices of ag commodities.

For years now, ag subsidies have helped enable Archer Daniels Midland to buy the corn it transforms into high-fructose corn syrup at well below corn's production costs. Meat producers like Smithfield Foods use cheap corn as fodder to run their profitable -- and socially and environmentally ruinous -- feedlot operations.

If the subsidy system bolsters the bottom lines of a few transnationals, it does little for most farmers. Overall, just 10 percent of U.S. farms grab 72 percent of subsidies. A large majority, including fruit and vegetable grwoers, get none at all.

Overseas, as the anti-hunger NGO Oxfam has shown over and over again, the situation is even worse. Giant U.S. corn surpluses has spelled despair for Mexican farmers since Nafta dismantled domestic protection in 1994. In Africa, where farmers have been prodded for decades by the World Bank and other supranational institutions to produce cotton for the global market, cotton farmers must compete with U.S. producers who can sell for well below production cost. Predictably, the African farmers lose.

Many observers had hoped for subsidy reform from the 2007 Farm Bill. The WTO, in its Doha Round of trade talks, has aggressively prodded the U.S. and the European Union to slash ag subsidies. The carrot dangling in front of the two great horses of global ag was this: if you slash subsidies, we, the WTO, will force open developing-world markets to your farm goods.

The talks collapsed two weeks ago, though, and probably won't resume anytime soon. The mainstream U.S. farm lobby, a force in national politics through the patronage of farm-state senators, had signaled a willingness to let go of subsidies. Essentially, the farm lobby's agenda for Doha was to ensure a dollar in global trade for every dollar it surrendered in government support. If the WTO could use Doha to force open the markets of more "developing nations" to U.S. farm goods, then the farm lobby would go along with reduced subsidies.

But when Doha failed, the lobby's willingness for reform tumbled like corn prices after a bumper crop. "You have to look at the negotiating leverage that could be lost if we go ahead and write a farm bill that cuts back on commodity supports," a lobbyist for American Farm Bureau Federation, the voice of U.S. industrial-scale farming, told Associated Press last week. The Bureau is now pushing for an extension of the generous 2002 Farm Bill.

Despite the Bush Administration's desire for a less costly Farm Bill, the farm lobby is likely to get its way. The Wall Street Journal reported last week that the "collapse of global free-trade talks is likely to kill any chance of overhauling America's farm-subsidy program for years," adding that, "With any Doha obligations now off the political radar, the congressional agriculture committees that will write the next farm bill, which could last five years, are doing business as normal."

But Doha's failure isn't quite as disastrous as Oxfam and other left-wing critics make it out to be. Indeed, Doha's whole thrust was to boost global trade, not boost local economies. It has always made an odd cause celebre for the likes of Oxfam.

Granted, the U.S. subsidy program is egregious and in need of reform, but slashing it wouldn't likely do much for southern-hemisphere farmers looking to sell into the global commodity market.

According to Daryll Ray, a University of Tennessee agricultural economist, if the subsidy cash cow dries up, U.S. commodity farmers will initially respond to the drop in income by producing more -- thus putting more downward pressure on prices and farm incomes. Ray argues persuasively that for subsidy reform to boost farm incomes worldwide, it will have to be accompanied by a system of price supports in the U.S. -- a vintage New Deal program which was crushed by Reagan's free-market zeal in 1987 and that has zero political traction.

Thus, even if Doha had succeeded, it's unlikely that African cotton farmers or Mexican corn growers would have gotten much relief anytime soon.

Moreover, it's a myth that ending a subsidy system that benefits multinationals at the expense of small farmers everywhere will leave a "level playing field" in its place. A half-century of government support for large-scale farming has created a tremendous infrastructure for industrial food production and long-haul distribution. Food processing enterprises -- from meat-slaughtering to cooling to dairy-bottling facilities -- have consolidated beyond imagination.

Simply put, the infrastructure for producing food for nearby consumption has withered. Farmers markets and community-supported agriculture (CSA) programs have spread dramatically over the past 15 years, but still supply a tiny fraction of the nation's food. Small-scale farming does not produce sufficient profit to rebuild local infrastructure. Doing so will require significant public investment.

Once the government slashes the multibillions that now go to mega-farming, that money is likely gone for good. Misadventures in the Middle East look set to pressure U.S. fiscal budgets for the foreseeable future. Rather than campaigning to end government support for agriculture, progressives should think in terms of a reform agenda.

Let's take the cash now burnishing the bottom lines of Archer Daniels Midland, etc., and create a Farm Bill that benefits small-scale producers and consumers alike.

I'll be laying out such an agenda in the weeks to come.

Looking forward to it

Complicated business this.

In the end, it all comes down to biodiversity. Poison Darts--Protecting the biodiversity of our world
Sounds like

A similar plan to cut subsidies for fossil and nuclear power and then use half of the savings for direct tax incentives to consumers to install wind and solar systems and buy plugin vehicles.  And use the other half of corporate welfare cuts to pay down the deficit.

Politicians voting to cut corporate welfare?  How could that happen?  

And how about those huge new fuel farming subsidies?  The worst of both worlds, energy and agribizz corporate welfare combined.

http://amazngdrx.blogharbor.com/blog

yeah

I'm glad to see you don't propose simply washing away all subsidies, end of story.

We all know what kind of a place a "free" market can be.

Diana

no, we should do what we can...

to abolish as much of the subsidies as we can regardless of their trade implications- they trash the environment and waste money- since this isn't possible we can shift some to better uses but an overall reduction is the way to go- we don't need farmers on welfare- even small ones....

J.S.

I teach environmental economics and blog at www.voicesofreason.info.

Yo

"we don't need farmers on welfare"

The farmers are not the ones on welfare, the corporations are on welfare.

http://amazngdrx.blogharbor.com/blog

"We don't need farmers on welfare"

If you're not careful, you won't have farmers at all.

Victual Reality
Say One Thing, Do Another

Many say they hate public corporate farming, saying that such farms just care about the bottom line, have no respect for the land they farm, and are totally impersonal.  But of course that is what they are, that is their nature, and to expect anything else is to seek milk from a coke machine.

Small farmers are committed to their human scaled operations generally operated by family members and maybe a few hired hands who have been with the family for sometime.  They farm the land so that it can be preserved.  Any small farmer who does not maintain their land will not be able to continue farming very long.

Take away the farm program and it will be the ones who watch the bottom line and take advantage of externalities to reduce its operating costs who will win and those who work on the human scale who will fail.

Farming is a good life and there is not much money in it, there is a sense of self-reliance.  Farmers pray alot, it is part of the job and one of the better risk management tools they have.  It is a way of life that once extinct will be as hard to recover as any other life form.

Our farm system is rooted in 20th century methods.  It is going to have to change dramatically.  Trucking food a thousand miles as the normal course of business is not durable.  Subsidies help us as a society shape this change.  It is one of the tools governments use to define what that government stand for, what it values, and where such a society seeks to find its future.

Subsidies might be poor business, but they are a part of good government.

I diagree with keeping the subsidies

The current subsidy system encourages unnecessary overproduction and with it rates of obesity. I do agree with 'farmers on welfare'. If ya can't grow corn without massive subsidies from the guvment, then why the hell ya growing it? Grow something else, ranch them cows, whatever.

Where are all the subsidies going? Corn and soy are the biggest takers. No need for that.

P.S.

Tom Philpott,
If there is no one farming, where would the food come from? With a massive shortage of food, farming will be more lucrative than the stock market. I know it's stretching it, but the reality isn't that far off. The reason that farmers are making so little right now is because they are flooding the market with the help of the subsidies.

The Problem Is The Administration

The problem is the administration of the farm program.  Under better administration the farm program could shape agriculture in a direction that promotes farming in a more responsible manner.

Don't blame the tool.

Now there's a thought

We could protect the small farmer (you know, the ones that only use a few hired hands that have been with the family for a long time, like in the Wizard of Oz) by asking Pat Robertson to call for a daily prayer for "small" farms (maybe greasing the skids with a tax free "donation" to the 700 club) while, of course, at the same time, phasing out most subsidies. I'm not that familiar with the power of prayer. Is it combinatorial? Does the probability of success go up with the number or individuals ingratiating themselves to a particular diety?

Now, as far as keeping small farms from going extinct. At what level of technology should they be frozen? Should we consider preserving only small farms that use eighteenth century technology? You know, ox drawn plows and horse drawn carriages, or should we freeze the technology even further back, at say, wooden plows and digging sticks? These matters must be given careful logical thought.

In the end, it all comes down to biodiversity. Poison Darts--Protecting the biodiversity of our world

Technology Can Be A Good Thing

I think it is mistake to rely on the technology of the past.  Times change.  Technology should not be frozen.  Small farmers do use modern technology.  They are adapt technology faster than do the big pig barns and feed lots.

I think the real issue that is of concern to you is religion and belief in God and the power of prayer.  Prayer and spritual belief is an important part of the human experience.  While Pat Robertson may speak to some he certainly does not speak to all people who hold a spritual connection.  Yes, I understand that there is power in numbers when it comes to sprituality, for ultimately sprituality is related to how we treat one another and the respect we hold for others and ourselves.  It is hard to respect ourselves and not respect others.

I realize I'm getting way off topic, but

...for ultimately sprituality is related to how we treat one another and the respect we hold for others and ourselves.

That kind of fuzzy reasoning isn't going to go very far getting humanity out of this mess. Beirut is a timely example demonstrating the true nature of this relationship between "spirituality" and respect for others and that is why I have no respect for Pat Robertson. He smells changing fortunes in the wind. He's a deluded opportunist and will probably end up doing more to hurt the cause than help it.

Some pearls from Pat:

"Over 100 years, I think the gradual erosion of the consensus that's held our country together is probably more serious than a few bearded terrorists who fly into buildings." -Pat Robertson, on the dangers of judicial activism

"Lord, give us righteous judges who will not try to legislate and dominate this society. Take control, Lord! We ask for additional vacancies on the court." -Pat Robertson

"Maybe we need a very small nuke thrown off on Foggy Bottom to shake things up" -Pat Robertson, on nuking the State Department

"You know, I don't know about this doctrine of assassination, but if he thinks we're trying to assassinate him, I think that we really ought to go ahead and do it. It's a whole lot cheaper than starting a war ... We have the ability to take him out, and I think the time has come that we exercise that ability. We don't need another $200 billion war to get rid of one, you know, strong-arm dictator. It's a whole lot easier to have some of the covert operatives do the job and then get it over with." -Pat Robertson, calling for the assassination of Venezuelan President Hugo Chavez

"Just like what Nazi Germany did to the Jews, so liberal America is now doing to the evangelical Christians. It's no different. It is the same thing. It is happening all over again.
It is the Democratic Congress, the liberal-based media and the homosexuals who want to destroy the Christians. Wholesale abuse and discrimination and the worst bigotry directed toward any group in America today. More terrible than anything suffered by any minority in history." -Pat Robertson

"I would warn Orlando that you're right in the way of some serious hurricanes, and I don't think I'd be waving those flags in God's face if I were you, This is not a message of hate -- this is a message of redemption. But a condition like this will bring about the destruction of your nation. It'll bring about terrorist bombs; it'll bring earthquakes, tornadoes, and possibly a meteor." -Pat Robertson, on "gay days" at Disneyworld

"(T)he feminist agenda is not about equal rights for women. It is about a socialist, anti-family political movement that encourages women to leave their husbands, kill their children, practice witchcraft, destroy capitalism and become lesbians." -Pat Robertson

"I know this is painful for the ladies to hear, but if you get married, you have accepted the headship of a man, your husband. Christ is the head of the household and the husband is the head of the wife, and that's the way it is, period." -Pat Robertson

"I'd like to say to the good citizens of Dover: If there is a disaster in your area, don't turn to God, you just rejected him from your city. And don't wonder why he hasn't helped you when problems begin, if they begin. I'm not saying they will, but if they do, just remember, you just voted God out of your city. And if that's the case, don't ask for his help because he might not be there." --Pat Robertson, after the city of Dover, Pennsylvania voted to boot the current school board, which instituted an intelligent design policy that led to a federal trial

"God considers this land to be his. You read the Bible and he says 'This is my land,' and for any prime minister of Israel who decides he is going to carve it up and give it away, God says, 'No, this is mine.' ... He was dividing God's land. And I would say, 'Woe unto any prime minister of Israel who takes a similar course to appease the E.U., the United Nations, or the United States of America.' God says, 'This land belongs to me. You better leave it alone.'" --Pat Robertson, on why Israeli Prime Minister Ariel Sharon suffered a massive stroke


In the end, it all comes down to biodiversity. Poison Darts--Protecting the biodiversity of our world

Well

"At what level..?"

At a really small local level, as well as a 1000 acre level, with robotically assisted agriculture.

Powered by renewable energy using organic farming methods.

The worst alternative is the western New Mexico feedlot dairy environmental destruction.  Instead of farmers illegal workers slaving away to slash costs and devestate groundwater with chemical agriculture.

http://amazngdrx.blogharbor.com/blog

spirituality, etc.

Whether Biodiv has committed a grave e-sin by bringing up this off-topic, "power of prayer" business, far be it from me to judge.  All the same, I am glad he did.  It is always well done, to expose the hateful, mischievous mind of Pat Robertson, by quoting his own words, words that no true orthodox Christian could ever recognize as being uttered by a truly Christian mouth.

Can the decades-old tragedy of Lebanon be assigned to religion gone wrong?  And does the biblical tradition, including not only Judaism and Christianity but also Islam -- yeah, the same tradition in spades! -- , deserve all the blame?  Oh, gosh, that sounds at least like a reasonable hypothesis.  But surely we go too far, and are acting just as Talibanish as those whose deeds and words we deplore, if we advance from condemning Hizbullah's rocket attacks, and the Israelis' disproportionate response, to a general condemnation of all that can be called religion.

The ever-self-effacing Jon Meacham wrote a moving cover story for Newsweek (August 14) (eve of the Feast of the Assumption -- which ought to be declared Environmentalism Day -- ask me why!), on the great old Protestant preacher Billy Graham, in retirement.  Jon clearly loved doing this story.  Jerry Falwell is quoted proudly declaring that his "mission," unlike Graham's, is to "confront the culture"; Graham's son and heir Franklin said, "I think the last election was a moral one -- people of all faiths, Christian, Jewish, Hindu, Muslim, Buddhist, felt that the gay agenda that the Democratic Party had essentially adopted and supported was scary.  It scared a lot of people of all faiths."  But Billy for his part, who in the past was usually sweet and eirenic, is lately especially mellow, and otherworldly, refusing to demonize, or to pronounce condemnations.  He even seems to be retreating on the literal inerrancy of the Bible, which to us Catholics into biblical scholarship counts as a major advance.

Back to the farm:  Apologies to Tom Philpott, if he is put out at all by my continuing the digression.  I always read and enjoy what Tom writes, in fact, and missed him when he was (presumably) away during his busy season.

To FFletcher: We have very different perspectives on the world, and so naturally do not always see eye-to-eye.  But you should know I very much like your "technology can be a good thing" message, above, even if the "power in numbers" part seems utterly un-Protestant and indeed un-Christian.  The part that Biodiv disparagingly quoted, on the other hand, is pretty close to the deepest wisdom of the Hebrew Prophets.  If he wants to dismiss you for reasoning "fuzzily," let him go; of course he would be the fuzzy one, for apparently assuming he can toss out all religion in one convenient throw-away container.

Finally, though, I come around to Biodiv's opening words: "Complicated business this."  As the husband of a farmer's son from Imperial Valley, CA, with sympathies for corn farmers in Oaxaca and cotton farmers in Mali, etc., and with mistrust for ADM and all the big-corn-related industries that Michael Pollan warns us about, I thus far agree entirely with Biodiv.

Chickens deserve our true friendship! So do fish! So do other sentient beings! Let us learn to be kind.

Thank You Caniscandida

Caniscandida your writing is often enlighting, thank you for your words.  I unfortunately am better with my non-verbal mathmatical intuition than in my verbal pursuits, espeically during the week.

I must say to what I was referring when I used the "power in numbers."  When I was a child I learn that wherever two or more are joined my name there I shall be with you.  I was not sure what that meant until I got older and I began to make some sense of it.

When we discover the strength of sprituality in our ownselves we come to understand a bit of what we are in universe and for that matter something of what is the universe.  However, that is a very big thing for us to understand, probably too big.  By exploring our spritual side with others in a respectful manner we grow in a manner than has balance and greater understanding of the world and its people.  If we grow our spritual understanding within ourselves and by ourselves nothing new is introduced, only the old is re-hashed.  It can be a receipe for insanity, certainly imbalance.

I find that too many give TV religious people too much attention.  I find these leaders so full of themselves.  I grew up in a small farming ranching community, those TV personalities were not a source of spritual leadership with anyone I know there.  I think that often it is those who are alone in their search for God who find something in the likes of Rev. Robertson.  He can grasp on to that thread of reasoning that can get all twisted around inside a mind and seem to be truth.

Sanity is best found amoung the people and with the people and so is God.

When I orginally wrote the piece above I attempted to contrast with the risk management tactics of the poor as to those of the corporation.  It is funny how my Mom would approach potential risks with a prayer, while I find myself appling hedges, straddles,  forward contracts, puts and calls, as well as taking phyiscal deliveries.  It is the irony of it all, for I think Mom got a different, more peaceful form of satisfaction from her risk management than do I.

With regards to subsidies, I believe they are an important tool for Government, but they must be applied with a appropriate vision.  I believe this has been a problem for over 40 years.  It is time for a change.

Who Benefits


    It is interesting how many of Gristmill's Bloggers regularly attack "left wingers".  Not sure if this is a trend, or what?? (smile).

    Tom raises some interesting points about who gets subsidies and who doesn't (one of my relatives who hasn't farmed in over 30 years gets around $2000 a year for not growing something or another, he actually rents out his land).  

    It may be true that in the developed world, local farming can be profitable, but for the developing world, it is the ability to sell excess produce to those who have more money (people in the developed world) that allows the poor to attract the capital needed to lift them out of poverty.

    All too often, those who favor local farmers here have no suggestions for how folks in poor nations might end their poverty.  

    What does ending poverty have to do with the environment?  Well, if you want to protect species or rainforests, you need to give people who live near and around them other ways to earn a living than exploiting them.

    Poor farmers who have access to richer markets may be able to afford the investment needed to practise sustainable farming methods.  Oh, and feed their families (if that matters).

    Perhaps it is only we left wing atheists who care about the poor nations (smile).  

    The idea that small farmers (or organic farmers) treat their workers well is a myth.  Some do, many do not.

    Another myth is any idea that anything in the existing agricultural system is protecting small "family" farms.  It is not, they continue to vanish in great numbers.

    If Americans can't be convinced to do anything about global warming (which is a looming disaster), how are you gonna get them to give up eating strawberries in January?  Or eating only locally grown beef?  (That would probably mean, based on a system of sharing, that New Yorkers would get beef about once every three months, and it would cost $100.00 a pound.)

    It is nice that so many of you have found a sense of spirituality that makes you happy.  Bravo.  I am distressed however to read statements like "When we discover the strength of sprituality in our ownselves we come to understand a bit of what we are in universe and for that matter something of what is the universe." or "Prayer and spritual belief is an important part of the human experience.".

    These may be an important part of SOME people's human experience, but not all of us.  Some of us feel that we have a place in the universe and a morality without gods.  It feels dangerous to hear sweeping statements about the importance of religion, because they suggest a lack of importance for those of us who are not religious.

    I feel that Tom's post mixes too many different issues (local farming, industrial farming, small farming, subsidies and an attack on helping poor farmers in developing countries) to be really clear.  But I eagerly await his agenda which hopefully will include suggestions on how poor farmers might be helped.

    And it would not hurt if it mentioned farm workers in America (who still live in conditions not much better than their third world counterparts). (a plug) (smile)

Patrick

"strength"

Dear FFletcher,

no need to go on at length, but I just want you to know I have read this last beautiful message of yours many times.

As much as I like the "When we discover" paragraph, I find myself even more moved by the "When I originally wrote" paragraph.

How blessed you are, to have had a mother like that!

Chickens deserve our true friendship! So do fish! So do other sentient beings! Let us learn to be kind.

fritto misto, abbondanza!

Patricciuccio bambino, so lovely to have you back!

Good for you, for standing up as the voice of ethical atheism!  Please do not be distressed, though, by FFletcher's comments, which I doubt FF means to comprehend either humanity-at-its-best, or humanity-naturally-and-universally.

But by all means, let us await FF's own response.

Meanwhile, if you simply must have that shark-fin soup, do not have anything stronger afterwards than the Egg Fu-Yung.

Anyway, never by any means ask yourself, What Would Jesus Order?

So far as that goes, though, my feeling is that, for dessert, the Second Person of the Most Holy Trinity would not like the kumquats, but would much prefer the orange sherbet.  With fortune cookie, of course.

Chickens deserve our true friendship! So do fish! So do other sentient beings! Let us learn to be kind.

We Think and We Believe

While raised a catholic I have stopped going to church 35 years ago.  I think formal religion is fine for kids, but when you get to be an adult it is time to think and act like an adult, and an important part of that is to come to terms with how you intend to live your life and what you believe in.  More importantly, how to live and continue to grow.  I don't support any formal religions, but I try to understand them.  There is a little truth in them all, and what do you call something with a little truth...a lie.  Still there is something to learn.  For many the formal religion is enough.  But for some, there is more out there.

It becomes a process of indivual development.  We start out as children, we go through certain predictable development phases and then we become adult.  We can still continue to grow, to shake off the old and take on new.  Psychology, philosophy, and experimentation help us grow.  Rollo May, the psychologist, wrote several book that I found especially enlighting.  His Courage to Create is one I read and re-read from time to time.  It is funny how often I come upon people who grew up with him, stayed with him, and otherwise knew him.  Another similar writer that I find crossing paths with is Ken Wilbur.  I have never met him, but we have a number of common friends.  He too was a friend of Rollo May.  Ken Wilbur is very interesting, check out his Integral Institute for more informatin.

I think we are more connected that we might commonly understand.

Hold The Shark Fin..... Try Tofu


Dear Caniscandida,

     I passed through your neck of the woods (JFK airport) on my journeys, but from your postings, you were travelling as well (smile).  Thanks for your kind words (and it is good to "see" you again as well), but don't forget, it is ethical vegetarian atheism, so no shark fin soup for me!  The tofu version is better (smile).

And for you and FFletcher, I grew up with religion as well (though not Catholic), but shed it very early on (early adolesence) and haven't missed it since.

I am not opposed to religion, but prefer it stick to the spiritual concerns of its members and stay away from politics and from society as a whole.  The continuing assaults on science by large portions of the American religious establishment (as well as on the rights of those they don't like, such as women, gays and environmentalists) deeply concern me.

It is an interesting world, in any case.

patrick

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