Jewish World Review June 1, 2010 / 19 Sivan 5770
Why You're Bribing Brazilian Farmers
By Jonathan Rauch
http://www.JewishWorldReview.com | Voters want change. President Obama promised change. Tea party supporters demand change. Well, brace yourself. Change has come.
The United States subsidizes the country's farmers, to the tune of $250 billion since 1995. That is not change. It has been a fact of life since the 1930s.
More specifically, the United States subsidizes its cotton farmers, to the tune of $3.5 billion a year since 2000 (a figure equivalent to five-sixths of the value of U.S. cotton production over that time, according to the Congressional Research Service). Cotton subsidies, too, have been a fact of life since the 1930s.
As of now, however, the United States also subsidizes Brazilian cotton farmers. This is something new.
"If the average person at home realized what's happening with the cotton program, there would be outrage in the streets," says Rep. Ron Kind, D-Wis., a perennial farm-subsidy critic. "Instead of reforming the cotton program so it's less market- and trade-distorting, we're now creating a taxpayer subsidy to go to Brazilian cotton producers. It's beyond ridiculous."
In 2002, Brazil filed a complaint against U.S. cotton subsidies with the World Trade Organization, of which the United States is a member. The international trade treaty allows signatories to subsidize farmers, and, in fact, they all do. The assistance, however, is supposed to be limited, and trade-distorting subsidies -- ones that either subsidize exports or encourage overproduction -- are subject to particularly tight limits.
Brazil argued that Washington's generous cotton program violated the trade rules. Despite some legislative and administrative efforts by the U.S. to tweak the subsidies, last year the WTO ruled generally in Brazil's favor. Brazil won the right to levy retaliatory duties on more than $800 million worth of U.S. exports annually, a prospect that manufacturers here reacted to with alarm.
The Obama administration found itself in a hard spot. Substantially changing farm subsidies requires an act of Congress, but the next farm bill is not due until 2012, and trying to get lawmakers to approve a stand-alone subsidy cut seems out of the question. A trade war with Brazil, however, is the last thing that Washington needs, particularly when the U.S. has been found to be in the wrong.
So last month the administration announced a deal with the Brazilians. In due course, Congress will change the cotton program. Until that happens, the U.S. government will send Brazil an annual check for $147.3 million (a sum based on estimates of the cotton subsidies' economic cost to Brazil), which Brazil is to spend on "technical assistance and capacity-building" for agribusiness. Translation: Washington is bribing Brazilian farmers to keep illegal subsidies flowing to U.S. farmers.
There's a lot you could say about this. If you were the sort of anti-government Republican who decries bailouts as a form of socialism, you might say something like the following:
"I say we get the government completely out of the market. Let's get rid of the farm bill. Let's get rid of all of it."
Those were the words of Clint Didier, a Republican running for the Senate in Washington state, who, according to The Seattle Times, calls the federal government a "predator" and vows to oppose the "Marxist utopia" that he says Democrats want to create -- "where everyone is taken care of from womb to tomb."
As the paper goes on to report, however, Didier, a farmer (and a former Washington Redskins tight end), has received nearly $273,000 in federal farm subsidies since 1995, according to a database maintained by the Environmental Working Group. Didier says that the amount is no more than $140,000, but his more relevant response is that if his competitors took subsidies (and they all do) and he didn't, he would be out of business.
In Tennessee, The Washington Post reports, tea party activists are divided over a Republican House candidate named Stephen Fincher, a small-government conservative who happens to receive about $200,000 a year in cotton subsidies. (Because large agribusiness grows so much of the country's food, big payments are common in the farm programs, and cotton is no exception. Over the past 15 years, according to the Environmental Working Group, the top 1 percent of cotton producers received almost one-fourth of the payments, and their checks averaged almost $300,000 a year.)
Some tea partiers are offended by a free-marketeer on the dole, but others are forgiving. "If it were an issue, then we would never elect a farmer to Congress at all," one Fincher supporter, a member of the Gibson County Patriots, told The Post. "Because, basically, most farmers get agriculture subsidies. If they didn't, they'd be broke."
Fair enough, especially where cotton is concerned. Randy Schnepf, an agriculture policy analyst with the Congressional Research Service, says that the cotton program is the tall daisy in the subsidy field. "Cotton subsidies are just too high relative to the market compared with any other program crop." One reason, Schnepf says, is that the United States is not a very competitive cotton producer. Another, the National Cotton Council says, is that India is using subsidies to muscle its way into the cotton export market.
If tea partiers are hypocrites for accepting government handouts, they are nevertheless correct in saying that the subsidy game is a roach motel. Checking in is much easier than checking out. That's the whole problem with subsidies -- but, as tea partiers never seem to acknowledge, it also makes subsidies very hard to cut.
Bleeding-heart liberals could add that the cotton racket's main victims are millions of poor cotton farmers in Africa, who are forced to compete with rich countries' treasuries. A 2007 study by Oxfam International found that U.S. cotton subsidies reduce the household incomes of West African farmers by as much as 5.7 percent.
So, isn't the answer obvious? As Republican Senate candidate Didier says, just end farm programs! Reform Washington! Change!
As if. In real life, there is no such thing as Big Government; there are only government programs. Each program has beneficiaries and defenders who care much more about retaining it than anyone else cares about getting rid of it -- which is why the average person at home has no idea what the cotton program is up to, and never will. "The agriculture interests are well entrenched," Kind says, and "it's tough to make this a real election-year issue that motivates people to go to the polls."
As for those angry tea partiers, a lot of them are from rural areas where farm subsidies are part of the landscape. They may be against Big Government in the abstract, but, Kind says, "when you ask them where they would go for cuts, they become mute and don't offer up many ideas." (Cotton, in fact, is a distinctly Red America crop, grown in the South and the Sun Belt. Many liberal Democrats would chop cotton subsidies in a heartbeat.)
Being anti-government is easy; any 10-year-old can do it. Being pro-reform -- now that's pretty hard. In 2008, President Bush sent Capitol Hill a reform-minded farm bill, which went straight into the circular file. He then vetoed what he correctly criticized as a wasteful farm bill. The congressional override was a shining example of bipartisanship, passing by 82-13 in the Senate. All Bush got for his trouble was humiliation. The Obama administration, heeding that lesson, is unlikely to send up a detailed farm bill for 2012.
The voters have every right to be exasperated with politicians. But they should be more exasperated with themselves; watch what they do to any candidate who has the gall to name specific programs to cut. Voters should be most exasperated of all with opportunistic demagogues who rail against Big Government while scorning the only kind of change that is really possible: incremental change.
The farm programs just might be ripe for some. Fiscal pressure and trade commitments are closing in. Voices as disparate as Kind and House Agriculture Committee Chairman Collin Peterson, D-Minn., are predicting a different kind of farm bill in 2012, possibly one that retreats from market-distorting commodity subsidies pegged to prices, and moves instead toward an income-stabilizing safety net for farmers. Former Rep. Charles Stenholm, D-Texas, is an unabashed farm-program champion from a cotton-farming family, but he thinks that even the farm lobbies are resigned to accepting that, as he puts it, "we can't keep spending at the rate we're spending."
Even so, rationalizing the country's broken farm policy would be a triumph. Old hands say that a business-as-usual farm bill remains the most likely outcome. Whether tea party radicalism can make itself useful in the slow, insidery, and painfully hurdle-strewn process of legislating a smarter farm bill will be a good test of whether the movement can mature into something more than a tantrum.
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