Dan Minette wrote: > I'm missing something here. Where is the untold billions is subsidy? The > only place that I see a direct subsidy is the export-import bank. At > > <snip sources> > For the life of me, I can't see why 700 in export subsidies million spread > over all exports (worth about 1.4 trillion dollars) will really affect > Australia all that much.
There are many and varied sources of subsidy for US farmers, the main one being the Commodity Credit Corporation (US Dept of Ag). Payments from the CCC are made under the 1996 Farm Bill, and do not include the "emergency payments" made in 1998 to counter the effect on US Agricultural exports of the rising US dollar, and which have been made each and every year since 1998 as emergency payments. There are 2 broad categories: Program crops (wheat, feed grains, rice and cotton) supported mainly through govt budget outlays, and import competition subsidies on sugar and dairy products, which are supported by artificially high internal prices. Dairy has a hand in each purse and collects export subsidies as well. A summary is as follows: (fixed width font required...) Commodity CCC outlays Other subsidies Total subs % of prodn value Wheat 3.7b 1.4b 5.1b 45% Corn 6.2b 2.2b 8.4b 31% Rice 1.1b 0.6b 1.7b 31% Other Grain 0.9b 0.1b 1.0b 41% Cotton 2.2b na na na Soybeans 1.4b 2.0b 3.4b 20% Sugar 0.1b 1.2b 1.3b 61% Dairy 0.5b 12.9b 13.4b 55% Other 4.4b 13.2b 17.6b 21% These are per year figures, averaged for the period 1998-2000, in US dollars. Note that beef, pork and poultry are major components of the US Agricultural production, but between them get around USD2b in support. Since 1996, US production of program crops has increased, while commodity prices have fallen - US farmers are paid not to adapt to the world commodity markets. Given that this has been in place since the New Deal legislation of the 1930's, (which was designed as a temporary measure to survive the depression and dust bowl problems), were talking "untold billions". The really sad part is that it is marketed/lobbied as a saviour to those poor farmers who struggle to make a living, but it goes to those who can afford to manipulate their plantings and yield to get the best subsidy. The poorest 6% of farmers received less than 1% of the 1999 govt payments. Ted Turner qualified for a huge agricultural subsidy last year... The 2002 bill before the house today increases most subsidies, and fails to decouple support and production (which would encourage US farmers to move into more profitable and/or efficient yields). The effect on Australia is not the few billion in subsidies itself, it is the price lowering effect. Without subsidies, Australia would be cheaper - with subsidies, US is cheaper, so the US gets the export deal. We lose, and we have to find other (less attractive) markets. Cheers Russell C.
