Farm Bill Robs Poor to Pay Rich

CARE, one of the largest humanitarian organizations fighting global poverty, announced yesterday that it would turn down $45 million in annual financing from the United States government because food grown in the United States under subsidies from the Farm Bill actually depresses the agricultural economies of the countries that receive food aid.

The practice literally robs the poor and gives to the rich.

As The New York Times explains, U.S. food donations compete with local farmers’ products, essentially perpetuating the cycle of poverty: “Under the system, the United States government buys the goods from American agribusinesses, ships them overseas, mostly on American-flagged carriers [which is stipulated by U.S. law], and then donates them to the aid groups as an indirect form of financing. The groups sell the products on the market in poor countries and use the money to finance their antipoverty programs. It amounts to about $180 million a year.”

Crops are cheap for the federal government to buy because the Farm Bill provides subsidies to U.S. farms to over-produce commodity crops like corn and soy—a violation of international trade agreements. As the Center for American Progress’ Jake Caldwell has explained, wealthy country subsidies deprive developing countries of a market for their agricultural products, leaving many poor farmers unable to compete in the global market.

The Center for American Progress has put forward a plan that not only levels the playing field by allowing foreign growers to compete, but also transforms American agriculture by allowing the U.S. to grow its own energy. The cornerstones of the plan include promoting sustainable biofuel production; growing clean energy from farm-based renewable energy and biofuels; capping unnecessarily high payments to U.S. producers and investing the savings research and development; building a strong safety net for American farmers; and opening new markets with a farm policy that strengthens U.S. agriculture, encourages exports to new markets and new customers, and ensures that trade liberalization, development, and poverty reduction move forward simultaneously.

Overproduction drives down prices on the global market, while subsidies support the farms either through direct payments, loans, or price supports. Yet profit margins for individual farmers remain low compared to those of agribusiness giants that sell chemical fertilizers and genetically enhanced seeds to those farmers. Foreign farmers cannot compete with the artificial price floor created by the Farm Bill and therefore cannot compete by growing grain locally while cheap products cascade out of ships flying the American flag. Farmers in developing nations suffer while U.S. agribusiness booms.

Defenders of the system point out that the food aid supports crucial anti-poverty work. But large NGOs including the Rockefeller Foundation and the Bill and Melinda Gates Foundation agree with the Government Accountability Office that the system is “inherently inefficient.”

CAP’s plan for reforming the Farm Bill would diversify and re-energize U.S. agriculture by encouraging domestic production of dedicated energy crops and eliminating over production of traditional commodity crops. This strategy promotes sustainable energy, combats catastrophic climate change, and promotes equitable trade that can grow the economies of developing nations.

American farmers growing energy crops can increase their profits while foreign growers can grow food to sell at competitive prices. Ultimately, U.S. farmers growing commodity crops like corn and soy would benefit as well because competition would drive up prices and eliminate the need for subsidies through the Farm Bill.

Reproduced from: www.americanprogress.org
Released on: 16 August 2007

Farm Bill showdown

The 2007 farm bill, as approved by the house on the eve of the august recess, is as shambolic a piece of legislation as will ever be okayed by a chamber that frequently endorses the incomprehensible and the indefensible. But what is truly frustrating about the house's version of the five-year, $286 billion blueprint for everything from agriculture and food policy to trade and energy development is that this complicated mess of a measure cannot be easily hailed or condemned.

On the plus side, it makes significant new commitments to encourage sustainable farming practices, fund the conversion to organic farming, strengthen food-safety protections and expand nutrition initiatives that are the essential food-policy components of this omnibus legislation.

On the negative side, the House bill proposes to open gaping loopholes that would allow environmentally destructive factory farms to qualify for funding intended to help family farmers conserve the land; maintains corrupt practices that stifle competition in the livestock industry; and fails to endorse basic health-and-safety moves like banning the practice of blasting spoiled beef with carbon monoxide to make it appear wholesome.

Hovering above all the good bits and nasty pieces of the measure is that it would do little to change our corrupt system of paying subsidies to some of the wealthiest nonfarmers in the world. Nor does the House address the fact that the bulk of the money intended to maintain diverse and competitive family farms would go to a handful of Southern states that overproduce crops like rice and cotton.

The best that can be hoped for now is intervention by the Senate, where Agriculture Committee chair Tom Harkin says, "We can't afford to settle for an extension of the status quo--not in terms of budget, and not in terms of policy." But for that to happen, we need to broaden the public discussion at a time when, as Representative Rosa DeLauro says, "too many Americans know too little about the farm bill and its impact on our lives."

The fact that debate about farm and food policy plays out on the margins of the national discourse, thanks to media that treat rural America as a punch line, makes it too easy for politicians and interest groups to distort the discussion. For instance, House Speaker Nancy Pelosi can get away with her absurd claim that the House bill is "reform" that "takes America's farm policy in a new direction." Not true. The Speaker chose the status quo over innovative proposals by author Michael Pollan, chef Alice Waters and savvy policy groups like Food and Water Watch and the Institute for Agriculture and Trade Policy to stop pouring federal dollars into the coffers of agribusiness, establish a real safety net for working farmers, protect the environment and encourage the production of healthy foods. But just as Pelosi is wrong to dub herself a reformer, so too are the editorial writers and Washington think-tank gurus who grumble about the rejection of their favored "reform." The plan so beloved by those so distant from rural America--a scheme by Representatives Ron Kind and Jeff Flake to establish the farming equivalent of the "individual retirement accounts" promoted by those who would destroy Social Security--failed because farm and consumer groups saw through its false promise of "market solutions."

Rejecting real reform as well as false promises, Pelosi backed a "Christmas tree" measure, which offered something for everyone--from agribusiness to Congressional Black Caucus members seeking long-overdue justice for minority farmers to consumer groups that want country-of-origin labeling on meat--then played on the fears of urban House members who know less about countercyclical payments than about crop circles.

To maintain their House majority, Democrats voted for a bill Pelosi told them would re-elect vulnerable farm-state Democrats--including nine freshmen on the Ag Committee.

That may be shrewd politics. But it's foolish policy. So now it falls to Harkin to cobble together an alternative measure that can pass the Senate, survive a messy reconciliation of House and Senate plans and then overcome a threatened presidential veto. That's probably too tall an order. But Harkin recognizes what needs to be done. He's a passionate supporter of nutrition and conservation programs, he wants a tight cap on federal payments so they don't go to millionaire "farmers" and he recognizes that the United States should do away with direct subsidies that fail most farmers, consumers and the environment.

As he shapes the Senate version of the farm bill, Harkin should embrace the proposal of three dozen farm and rural groups--led by the National Family Farm Coalition and the Institute for Agriculture and Trade Policy--and their labor, religious and environmental allies. They want to replace subsidies with a federally defined price floor that would in effect be a minimum wage for farmers and to reinstate strategic grain reserves to stabilize crop prices. Harkin should listen to Iowa farmer George Naylor, who serves as president of the farm coalition and who says it is still possible--and politically smart--to forge a farm and food bill that "will benefit family farmers by giving them a fair price for what they produce instead of continuing with ineffective subsidies that have failed rural America."

Released on: 17 August 2007
Reproduced from: www.agobservatory.org