halting farm subsidies?
[New York Times] February 13, 2003 Republicans Back Down on Raising Farm Aid By ELIZABETH BECKER WASHINGTON, Feb. 12 - Vice President Dick Cheney persuaded Congressional Republicans today to drop plans for adding new farm subsidies, stepping into a domestic political argument while trying to avoid a contentious foreign trade dispute. The United States' trading partners gathered in Tokyo this week to discuss how to trim and eventually eliminate farm subsidies, which in the United States and Western Europe together are equivalent to the gross domestic product of all of Africa. Robert B. Zoellick, the United States trade representative, would have faced a hostile reception in Tokyo had Congress approved an omnibus spending bill that included $3.1 billion of disaster relief that amounted to new subsidy payments. Before Mr. Cheney intervened, the Senate had proposed giving an automatic 42 percent subsidy increase to farmers now receiving federal aid, whether or not they had actually suffered any loss from drought or flooding. The increase would have applied to all farmers who live in counties designated as disaster areas in the last two years. That would have further added to the credibility problem between the stated American goals of free trade and their farm policy, said Gerry Kiely, the agricultural expert for the European Union in Washington. This is supposed to be the year of the farmer in world trading circles. Rich countries have bowed to poor countries' loud complaints and agreed to begin negotiations on their multibillion dollar farm subsidies, which institutions as diverse as the International Monetary Fund and Oxfam say are among the most unfair trade barriers, responsible for wrecking the livelihoods of millions of poor farmers in Asia, Africa and South America. When you think about the role of farm subsidies and international trade, it has been just disastrous, said Jeffrey D. Sachs, director of the Earth Institute at Columbia University. He said subsidies drive down crop prices and block access to American markets. Congressional negotiators had asked Mr. Cheney to help break a deadlock between the Senate and the House over disaster relief for farmers, which was holding up the current year's financing for much of the federal government. He told the Republican leadership that the money had to come from agricultural spending and that farmers and ranchers had to prove they had suffered a loss, returning the plan to its original intent. A spokeswoman for Mr. Cheney said he was carrying out Mr. Bush's policies regarding agricultural policy and fiscal discipline. In signing the farm bill last year, the president said that the new law was meant to keep the country's trade commitments and that the best way to help our farmers and ranchers is trade. He also said the bill would remove the need for supplemental payments every year, which he called a bad fiscal habit. Under today's compromise, which must be approved by the Senate and the House, the money for disaster relief will come out of a new conservation program sponsored by Senator Tom Harkin, a Democrat of Iowa, when he was chairman of the Agriculture Committee last year. This is a major hit to the key new conservation program in the farm bill that the president signed nine months ago, saying it was one of his big environmental initiatives, said Mark Halverson, spokesman for Mr. Harkin. Among the 25 trade ministers attending this week's talks in Tokyo are Mr. Zoellick and Pascal Lamy of the European Union, who both will be crucial to the eventual success of the bid to reduce subsidies. Sophia Murphy of the Institute for Agriculture and Trade Policy in Minneapolis said the debate over disaster relief showed what she called the continued deep disconnect between America's trade agenda promoted by Bob Zoellick and the agricultural policy promoted by Congress. It will difficult enough to get a global agreement on agriculture without Congress raising the suspicions of our potential trading partners with the kind of debate we heard this week, she said in a telephone interview. We needn't paint ourselves into a corner where we are not able to give the trade partners the one thing they want to see from us - a reduction in farm subsidies.
farm subsidies
[was: RE: [PEN-L:20964] Re: RE: Farm "subsidy" data base] Gene writes:My argument is that selling an undifferentiated commodity on the market -- like many farm commodities -- actually results in prices that only cover marginal costs, not average costs. The difference has to be made up somehow. That is what I see as the idea behind farm subsidies. in theory,in acompetitive market without "subsidies," the exit of farmers from the market would mean that prices gravitate towardthe minimum average cost. I agree with you that the clout of the Farm Bureau, et. al. shape both the size and destination of the money. The other aspect of this is the international -- keeping corn production high (through the farm subsidy) ruins farmers in other countries. the latter is because ofdumping, no? But even without dumping, if the US farmers sold at minimum average cost, wouldn't that drive most non-US farmers out of business, since US farming is so productive by capitalist standards? Another aspect is the subsidy for turning corn into automobile fuel, a subsidy for ADM, our friendly supporter of NPR.. Why subsidize driving when people are hungry? supposedly, the investment in methanol is supposed to pay off in terms of cleaner air. Does it, or is the subsidy just a boondoggle -- or does it just encourage more driving (and thus more pollution)?Jim Devine
'Greening' farm subsidies
Thursday September 6 1:04 PM ET 'Green' Farm Payments May Run Afoul of WTO By Charles Abbott WASHINGTON (Reuters) - The ``green'' payments touted as the new path for U.S. agricultural supports could run afoul of world trade rules, the same peril facing the billions of dollars in new crop subsidies proposed in a bill awaiting a vote in the House of Representatives. Environmentalists see this year's overhaul of U.S. farm policy as their best chance in a decade to expand soil, water and wildlife conservation programs. They hope to capture a larger share of the $73.5 billion bill than now offered. In particular, they trumpet the potential of ``green'' payments to growers who integrate conservation into their daily operations. There are more than 900 million acres 364 million hectares of ``working'' lands on U.S. farms and ranches. Lawmakers and farm analysts said the bill now awaiting debate in the House could exceed World Trade Organization rules that limit outlays on trade-distorting farm subsidies. ``There is some chance,'' House Agriculture Committee chairman Larry Combest agreed during a Reuters interview. WTO MEETING TO MULL SUBSIDIES U.S. lawmakers are tackling the issues of environmental payments and bigger farm subsidies as the WTO prepares for a November meeting to launch world trade talks. Farm subsidies will be a key issue for the meeting in Qatar. The United States seeks elimination of export subsidies, removal of import barriers and deep cuts in trade-distorting domestic farm subsidies. But other nations have criticized the United States for its export credit program and $30.5 billion in bail-out payments to American farmers since 1998. U.S. analysts said a plan for new ``green'' payments could require skillful drafting to avoid WTO strictures, although proponents are confident their programs are allowed. ``Any kind of conservation spending is going to fit into the green box,'' said a spokesman for Rep. Ron Kind, Wisconsin Democrat and sponsor of a ``working lands stewardship'' plan that could cost $3.6 billion or so a year. In WTO parlance, ``green box'' programs have little impact on farm production or trade and are permitted. The United States agreed to spend no more than $19.1 billion on ``amber box'' -- or trade distorting -- subsidies linked to farm production. Craig Thorn, of the consulting firm DTB Associates, said care would be needed to assure a conservation program satisfied WTO rules. ``It's possible to create these (green box) programs,'' Thorn said. ``You just have to be careful when you're doing it.'' For example, WTO rules on agriculture say environmental payments ``shall be limited to the extra costs or loss of income'' due to requirements of a government program, ``including conditions related to production methods or inputs.'' Some House Agriculture Committee staff workers say that language would disqualify the hefty payments envisioned by Senate Agriculture Committee chairman Tom Harkin. The Iowa Democrat is a leading advocate of paying growers up to $50,000 a year if they follow a variety of conservation practices. Thorn said Harkin's plan might fit within other WTO rules allowing direct payments to farmers, or ``decoupled'' income supports that are not linked to crop or livestock production. ``You'd have to look at the details of the program to figure out if it would be green box,'' he said. NEW SUBSIDIES FOR US FARMERS Agricultural economist Dave Orden of the Virginia Polytechnic Institute said proposals for green payments, ``may suffer from the same weak WTO constraints as the House bill does.'' The bill written by the House Agriculture Committee would trigger an estimated $37 billion in so-called deficiency payments over the next decade when prices received by farmers fell below target prices set by Congress. Those payments probably would be classified as ``amber box,'' analysts said. Combest said the threat of exceeding WTO spending limits could be eased by shifting some farm aid into decoupled payments, which also are part of the farm bill. Other routes might be available too, the Texas Republican said. But the debate over WTO compliance obscures the question of whether an emphasis on conservation would be good policy and what benefits it would bring, said agricultural economist Bruce Gardner of the University of Maryland. ``You may well overpay,'' Gardner said, citing the high rents initially paid bring land into the long-term Conservation Reserve to combat erosion and protect water purity. ``It's possible we've already done the most cost-effective stuff.'' On the other hand, Gardner said, a more finely tuned program might bring more desirable results. ``What will be proposed in the details?'' he asked. U.S. actions on farm policy could be scrutinized closely by other nations preparing for world trade talks. Virginia Tech's Orden said the lavish U.S. farm bailouts since 1998 sapped the drive for global reform. It ``would not do well
Re: Farm subsidies
Ian Murray wrote: [the EU and others will have a field day with the WTO violations] [NYT] AUG 12, 2001 Harkin and Lugar Join Forces to Take On Farm Subsidies By ELIZABETH BECKER Their main goal is to rein in subsidies to large farmers that date to the Depression and to emphasize land conservation and other environmental incentives instead. Very little agricultural subsidies go to small farmers. Each year one of our local papers publishes the rice subsidies for farmers in the county. Again, almost everything is lapped up by the big farmers. I'm sure Tim has the precise numbers at hand. Senators Tom Harkin of Iowa, the Democratic chairman of the committee, and Richard G. Lugar of Indiana, the ranking Republican, said in interviews that they opposed a bill drafted in the House. Indiana and Iowa have a much less on equal distribution of farm sizes than most other states. At issue is whether the huge $171.1 billion farm bill will continue to focus on subsidies for large farmers who grow basic crops like cotton, corn and wheat, as in the House measure, or whether the money will be spread to promote trade, conservation efforts, rural development and environmental protection, as in the proposed Senate bill. I wonder what measures would be used to promote trade. -- Michael Perelman Economics Department California State University [EMAIL PROTECTED] Chico, CA 95929 530-898-5321 fax 530-898-5901
Re: Re: Farm subsidies
I don't have the figures right with me, Michael, but I do know that the average subsidy in Butte County is over a million dollars per family farm. AND, here's an interesting twist on the issue this year: as you'll recall, some 20% of the rice land is being left fallow this year so that the irrigation district servicing the rice lands can sell the water to cities in Sonoma County, but even that fallow land receives the subsidy this year. In other words, the farms get two subsidies-- the first being the absurd water rights system in the first place, the second being the rice subsidy. The water rights were granted and continue to be granted on the premis that the farmers are, after all, growing a crop, but they turn around and sell the water for a huge profit, then they further collect a second subsidy on the crop they didn't grow. Somebody said something about a free market once, but it don't exist around here. tim --- Michael Perelman [EMAIL PROTECTED] wrote: Ian Murray wrote: [the EU and others will have a field day with the WTO violations] [NYT] AUG 12, 2001 Harkin and Lugar Join Forces to Take On Farm Subsidies By ELIZABETH BECKER Their main goal is to rein in subsidies to large farmers that date to the Depression and to emphasize land conservation and other environmental incentives instead. Very little agricultural subsidies go to small farmers. Each year one of our local papers publishes the rice subsidies for farmers in the county. Again, almost everything is lapped up by the big farmers. I'm sure Tim has the precise numbers at hand. Senators Tom Harkin of Iowa, the Democratic chairman of the committee, and Richard G. Lugar of Indiana, the ranking Republican, said in interviews that they opposed a bill drafted in the House. Indiana and Iowa have a much less on equal distribution of farm sizes than most other states. At issue is whether the huge $171.1 billion farm bill will continue to focus on subsidies for large farmers who grow basic crops like cotton, corn and wheat, as in the House measure, or whether the money will be spread to promote trade, conservation efforts, rural development and environmental protection, as in the proposed Senate bill. I wonder what measures would be used to promote trade. -- Michael Perelman Economics Department California State University [EMAIL PROTECTED] Chico, CA 95929 530-898-5321 fax 530-898-5901 = Check out the Chico Examiner listserves at: http://groups.yahoo.com/group/DisorderlyConduct http://groups.yahoo.com/group/ChicoLeft Subscribe to the Chico Examiner for only $40 annually or $25 for six months. Mail cash or check payabe to Tim Bousquet to POBox 4627, Chico CA 95927 __ Do You Yahoo!? Send instant messages get email alerts with Yahoo! Messenger. http://im.yahoo.com/
