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Western Farmers Fear Third-World Challenge to Subsidies
September 9, 2003
By ELIZABETH BECKER
AIX-EN-PROVENCE, France, Sept. 8 - Christian Vachier, the
last sheep farmer in his small commune north of here, is
wondering whether his pastoral life in the Lub�ron
mountains is about to end.
Halfway across the world, Dean Argotsinger, who raises corn
and soybeans on nearly 2,000 acres of land once cultivated
by his father and grandfather outside Denison, Iowa, has
the same worries.
Mr. Vachier grazes his flock on 36 acres of pasture and
sends them off in the summer to wild mountain meadows, a
land-intensive and expensive method underwritten by checks
from the European Union and the French government. His lamb
is never sold outside the region, much less overseas.
Mr. Argotsinger is a very different kind of farmer. He
considers himself modern and efficient. He uses chemical
fertilizers and receives more than $336,000 from the
government every four years and sells his grain in the
global marketplace.
But both farmers worry that they will be the targets when
trade ministers from around the world meet in Canc�n,
Mexico, on Wednesday to begin deciding which subsidies to
cut back in the wealthiest nations in order to lessen the
damage the subsidies inflict on poor farmers in the
developing world.
The world's wealthiest nations give more than $300 billion
of subsidies to their farmers every year, more than the
gross national product of sub-Saharan Africa. Those
payments are now the biggest complaint of poor nations.
"It's ridiculous that rich farmers are getting richer and
poor farmers are getting poorer," said John Nagenda, a
farmer in Uganda and adviser to President Yoweri Museveni.
"We are kept out of the world market. When countries like
America, Britain and France subsidize their farmers, we get
hurt."
Siphiwe Mkhize, agriculture attach� at the South African
Embassy in Washington, said: "We would give up foreign aid
if the farm subsidies were eliminated. The subsidies give
the rich-nation farmers the upper hand in all markets, and
we can't even compete in our own markets, much less
theirs."
Mr. Vachier, however, said, "Why should world trade rules
dictate whether French taxpayers can pay me to preserve our
way of life and protect our countryside?"
Though he has different views about world trade, Mr.
Argotsinger has similar complaints.
"The federal government made a promise to us farmers in the
farm bill last year and all at once they're telling us the
World Trade Organization can take that away from us," he
said at his Iowa farm.
From the hillside vineyards of Europe to the dense
cornfields of Middle America, dozens of farmers said in
interviews that they were anxiously awaiting the outcome of
the talks in Canc�n, where the first order of business is
farm policy.
In the past decade, the top quarter of farmers in the
developed world have steadily gained most of the subsidies
- 70 percent in Europe and 90 percent in the United States,
according to the Organization for Economic Cooperation and
Development. Those payments allow industrial-size farms to
produce many more acres of crops than are needed for
domestic consumption, and they are sold overseas at low,
subsidized prices.
Farmers in developing markets cannot compete with the cheap
imports. They lose out in their own markets and have little
chance of exporting.
A recent American-European farm proposal disappointed many
developing nations. Seventeen developing nations countered
by asking the United States to make deeper cuts in its
subsidies and Europe to eliminate subsidies that underwrite
exports.
The U.S. and Europe:
How Their Subsidies Differ
Subsidies began in times of
hardship - during the Depression in the United States, to
help farmers survive as their costs rose and market prices
stagnated, and after World War II in Europe, to encourage
farmers to increase food production and avert malnutrition.
But today Western countries are drowning in food, their
citizens more likely to suffer from obesity than
starvation, and the huge surpluses are sold cheaply
overseas.
The American system - with farms 10 times larger than those
in Europe - has grown the most lopsided. In 1995, the top
10 percent of American farmers received 55 percent of
government subsidies; in 2002 their share rose to 65
percent, according the Environmental Working Group.
While Europe also gives more money to its larger farms, it
is slowly shifting to reward small farmers like Mr. Vachier
who raise expensive, high-quality food that is rarely
exported, subsidies that are considered harmless to the
developing world.
"Cutting these subsidies to the huge farmers in favor of
the small farmers would also help small farmers in the
developing world," said Stefan Tangermann, author of the
O.E.C.D. report.
Pascal Lamy, the top European trade official, said the
answer for European agriculture "is shifting from quantity
to quality." When the European Union grows by 15 countries
next year, farm subsidies will be further diluted.
Philip Bloomer, director of advocacy at Oxfam, which
lobbies against farm subsidies, said that while Europe,
including France, is still among the worst offenders in
farm policy, it is slowly understanding that it has to
change.
"In Europe, we believe there is a glacial movement in the
right direction," said Mr. Bloomer. "In the United States,
there is a fairly rapid movement in the wrong direction."
The United States openly embraces increased trade as the
answer for American agriculture, heavily subsidizing the
biggest farms in an industrialized system that generates
huge surpluses for export. Robert B. Zoellick, the United
States trade representative, boasts that one out of every
three acres in the United States is planted for export.
It is highly unlikely that either the United States or
Europe will offer the concessions needed to undo the damage
of the system.
"Our American subsidy system is a crime, it's a sin, but
we'll talk a good game and get away with doing almost
nothing until after the presidential election," said C.
Fred Bergsten, director of the Institute for International
Economics in Washington.
Agriculture is now one of the few sectors of the American
economy where the United States runs a trade surplus, and
American businesses that thrive on subsidized global trade
want to keep the subsidy system in place.
In the past decade, industrial-scale farmers have tipped
their allegiance decisively toward the Republican Party,
which supports the current system. Political contributions
from agribusiness jumped from $37 million in 1992 to $53
million in 2002, with the Republicans' share rising from 56
percent to 72 percent, according to figures compiled by the
Center for Responsive Politics.
Those commercial companies were not disappointed when
President Bush signed into law last year a new farm policy
that increases permanent subsidies by $40 billion a year,
even though Mr. Zoellick had promised the developing world
that subsidies would be cut in this new round of trade
talks.
"Reducing these subsidies and removing agricultural trade
barriers is one of the most important things that rich
countries can do for millions of people to escape poverty
all over the world," said Ian Goldin, the World Bank's vice
president for external affairs. "It's not an exaggeration
to say that rich countries' agricultural policies lead to
starvation."
The Name of the Cheese:
Defending a Way of Life
For Europeans like Jean-Pierre
Boisson, mayor of Ch�teauneuf-du-Pape, a small village in
Provence, subsidies also represent survival of a
centuries-old way of life and of the kind of traditional
farming that produces the expensive, high-quality wine,
olive oil and meat for which his region is known.
Europe's environmental programs receive a mandated 15
percent of the $46.3 billion in annual European farm
subsidies.
The farmers around Ch�teauneuf-du-Pape worry that in
Canc�n, trade ministers with little understanding of
agriculture and its effect on a nation's food system and
countryside will cut the wrong programs.
Mayor Boisson is also watching carefully whether the trade
ministers adopt a universal respect for geographic
indicators, a form of copyright tying the name of a food
product to its region. Those labels guarantee the
authenticity of products like Roquefort cheese and grand
French wines; for farmers like Mr. Boisson, those labels -
and not government subsidies - ensure his profits.
Mr. Lamy, the European trade minister, has told colleagues
that if the World Trade Organization is willing to support
geographic indicators, he would discuss reducing export
subsidies.
Phillipe Mauguin, director of the French government's
Institute of Appellations of Origin, said the government
hoped that 20 percent of French produce would eventually
besold under a specialty labeling. France already sells $18
billion in products protected by appellations of origin.
"Without such labeling, there is zero protection for local
people, zero protection for local culture," said Mr.
Mauguin.
An Industry Remade:
The Passing of the Farmer
Iowans like Mr. Argotsinger know what it means to lose the
traditional farm way of life.
When the members of the Denison High School class of 1963
held their 40th reunion this summer, they counted only one
farmer among them. Over cold beers and enchiladas, they
guessed that at least 40 of the 108 men and women in their
class were either raised on a farm or spent their summers
on the farm of a close relative.
In one generation, they said, they became witnesses to the
remaking of American agriculture, which has been turned
upside down by globalization, altered federal farm
subsidies and the demands of the "big guys" to make
agriculture run on the principles of mass production.
"The subsidies let the big farms get bigger, and the big
companies end up controlling everything around here, paying
low prices for grain so they can control markets around the
world," said Gaylord Moeller, the surviving farmer of the
class of 1963. He said he had held on to the 160-acre farm
originally settled by his German great-grandfather because
he had resigned himself to living modestly.
Thomas Dorr, the under secretary of agriculture for rural
development and an Iowa farmer himself, advocates the
industrial-size farms and said in an interview that it was
wrong-headed to view agriculture in terms of small farms
versus large. American agriculture, he said, simply
reflects the increased global market.
"Marketplaces are always going to change, they are always
going to fluctuate," he said. "Everybody always frames it
in small versus large instead of where the opportunities
are."
Mr. Zoellick, the trade representative, has proposed
cutting over $8 billion in subsidies, but only if Europe
makes deeper cuts.
Keith Collins, the chief economist at the Department of
Agriculture, said there is "compelling evidence" that
subsidies do increase production, distort trade and
undermine poor countries.
"Payments increase production and production increases
exports," Mr. Collins said in an interview.
This American emphasis on exports has not only increased
the size of the farms, but has also limited what is grown
on them.
When Denison's boomers were born in 1945, Iowa's farmers
grew 17 commercial crops, including potatoes, cherries,
peaches, plums, pears, strawberries, raspberries and wheat.
Farmers sold vegetables from their truck gardens at harvest
time.
Now the commercial crops are down to four - feed corn,
soybeans, hay and oats - and Denison has a hard time
filling a farmer's market one afternoon a week.
"It's easier to get fresh fruits and vegetables in Des
Moines now than it is in Denison," said Cecelia Servoss
Arnold, a member of the class of 1963.
Denison is the birthplace of Iowa Beef Packers, among the
first slaughterhouses to use a modern assembly line system
that revolutionized the meat industry by eliminating the
need for most skilled labor.
Grain farms like Mr. Argotsinger's literally fed those new
slaughterhouses by raising the crops needed to feed the
hogs. Soon an industrial system was introduced to raise
enough hogs to be killed by the tens of thousands every
day.
Farmers emptied their barnyards and built factory-size
sheds in the rolling hills. They pack hundreds of hogs into
each building, feeding them with automated tubing and
siphoning off their excrement into open vats known as
manure lagoons.
While the odor and pollution are causing political battles
in the state, supporters say they are an integral part of
the new industrialization of agriculture.
"We're part of a global protein market," Mr. Argotsinger
said. "I'm growing corn for meat that will be sold to
China."
http://www.nytimes.com/2003/09/09/international/europe/09FARM.html?ex=1064136748&ei=1&en=43a2225cec0f108a
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