Why and How U.S. Farm Subsidies Must Be Reformed
US Farm Subsidies: Goals, Realities and Prospects
Will Allen & Ronnie Cummins
Organic Consumers Association
<http://www.organicconsumers.org/clothes/farmsubs070605.cfm>
When US farm subsidy programs began in the 1930s, the goal was to
keep family farmers on the land and provide food and fiber during
times of hardship, depression and war. In the late-1940s, soil and
water conservation subsidies were added to preserve rural resources.
Despite these lofty goals, the Environmental Working Group has shown
that only 36% of US farmers currently receive subsidies while farmers
in the developing world claim that US subsidies to cotton, rice,
corn, sugar and soybean farmers are trade-distorting and unfair.
Studies show that US subsidies depressed prices and allowed brokers
to dump commodities in foreign countries at prices well below the
cost of production for local farmers. Many markets in developing
countries are well-stocked with indigenous foods and fiber, but are
seriously disrupted by the dumping of cheap subsidized crops from the
US, EU and Japan.
Since 1995, more than 25,000 bankrupt cotton farmers in India
committed suicide, while more than a million West African cotton
growers lost their farms. More than a million corn and cotton growers
in Mexico have been driven off the land and thousands have been
forced to illegally cross the border, looking for work. Since 1990,
almost 20,000 small and medium-sized US farmers stopped growing
cotton and many filed for bankruptcy.
Large farming and brokerage corporations profit handsomely from the
$25 billion in annual crop subsidies and more than $20 billion in
water subsidies. Most of the subsidies go to farmers who grow corn,
rice, cotton, sugar and soybeans. Seven percent of US farmers
received more than 75% of farm subsidies and only 2500 farmers
received 78% of the cotton subsidies (more than $9 billion) during
the period from 1995 to 2003.
In 2003, Brazil sued the US and the EU in the World Trade
Organization (WTO) over unfair subsidies for cotton and sugar growers
and in early March 2005, Brazil won both cases. Following the WTO
decisions the US has agreed to change its subsidy programs. But how
the subsidy system is changed will bear watching and require pressure
to keep it from being business as usual in a different costume.
Much of US subsidy policy is justified by agribusiness as being
essential to a cheap food policy for consumers and an effective trade
policy for farmers. But, claims about "cheap food" are largely a
myth, since enormous costs are concealed from the public. In addition
to the market price, costs are added to food and clothing bills by
subsidies to farmers and to brokers for marketing or exporting
surplus crops. Also added are subsides for irrigation programs.
Taxpayers make these additional payments for meat, chicken, cereals,
processed food, rice, soybeans, grain, bread, sugar, milk, cotton and
cottonseed on April 15.
Taxpayers pay for the external costs of farming, including the
clean-up of farmland, rivers, lakes and aquifers damaged and
destroyed by farm chemical use and runoff. Taxpayers also pay for the
escalating Medicaid and Medicare costs associated with high cancer
and birth defect rates for farmers, farmworkers and rural residents.
Add up the market price, the farm subsidies and the external costs,
and America's "cheap food" becomes very expensive.
It is the subsidized farmers who are using most of the chemicals and
growing controversial genetically engineered crops. Agribusiness
interests argue that toxic chemicals and genetic manipulation are
essential if US farmers are to stay competitive in world markets.
But, this is also a myth. Pew Institute researchers have shown that
since 2000, US farmers lost $300 million per year in grain shipments
to the EU due to the EU refusal to buy GMO corn. The State Department
believes US farmers could lose an additional $4 billion per year with
the recent enactment of EU labeling and identity tracking regulations
for all crops.
US interests decry these trends as trade distorting and unscientific.
Research from the EU and elsewhere, however, has shown that GMO crops
have already caused life-threatening allergic reactions, a sharp
reduction in beneficial insects and soil organisms, damage to the
vital organs of test animals, an increase in the use of weed killers
and a 75% reduction in this year's monarch butterfly population.
At the same time that America's chemical and genetically engineered
export markets are in serious decline, organic markets are rapidly
increasing around the world. Tens of thousands of farmers in the US
and overseas have converted to organic production. Many are looking
for new markets, better prices, and how to farm without pesticides,
chemical fertilizers, hormones, antibiotics and GMOs. While the shelf
price for organic food is slightly more expensive, we would argue
that when you consider all the hidden costs for taxpayer subsidized,
chemical-intensive and genetically engineered food, organic food is
cheaper.
US organic farmers have made impressive gains in cleaning up millions
of acres of cotton, corn, rice, soy, and vegetable land that were
contaminated by toxic pesticides and chemical fertilizers. Until now,
farmers learned how to reduce or eliminate toxic chemicals at their
own expense, without the help of subsidies. A revamped subsidy system
could assist farmers in making those transitions, help rebuild rural
America, eliminate agricultural pollution, improve public health, and
reduce our escalating medical bills.
The recent WTO decision against US cotton subsidies provides farmers
and taxpayers with an opportunity to implement long overdue changes
in the subsidy programs, and redirect the program towards its
original goals. Subsidies should be available to all farmers (with
strict acreage and dollar limitations) who are willing to make a
transition to sustainable farming practices that promote public
health and conserve vital resources for our children and future
generations.
Fortunately, many sustainable farming and resource conservation
initiatives already have been enacted into Federal law, such as the
Conservation Security Program, Environmental Quality Incentives
Program, Conservation Reserve Program, Special Practices Programs and
renewable energy incentives. Unfortunately, Congress and the
Administration have consistently under-funded or not funded these
sustainable initiatives. Instead, they've used our tax dollars on
pork barrel subsidies for wealthy farmers and exporters.
Subsidy programs that help farmers make the transition to less toxic
farming should be the centerpiece of our next Farm Bill. Taxpayer
giveaways to rich US farmers and brokers are no longer acceptable to
the WTO. They should no longer be acceptable to US taxpayers.
###
OCA's supports limits on subsidy payments to large farms as the
first step in a major reorientation of our annual $20+ billion farm
subsidies program that would eliminate "non-green" subsidies and
replace them with subsidies that help family farmers and ranchers
make the transition to organic production, renewable energy, and
development of local markets. We also need a major increase in food
stamps so that low-income Americans can afford to buy healthy organic
food for themselves and their families.
--
Alexis Baden-Mayer, Esq.
Organic Consumers Association
1858 Mintwood Place, NW #4
Washington, D.C. 20009
Office 202-232-8997
Fax 202-232-8340
Mobile 202-744-0853
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