Why the Bush Administration looks set to jettison the farm-subsidy program, beloved of industry and
Long the bane of environmentalists and sustainable-agriculture proponents, the U.S. agriculture-subsidy system has drawn some unlikely new critics: top Bush administration officials.
92 percent of commodity program spending was paid on five crops — corn, wheat, soybeans, cotton and rice. The farmers who raise other crops — two thirds of all farmers — received little support from current farm programs.
Later, he deplored what he called “trade-distorting subsidies. ”
And Monday, U.S. Trade Representative Rob Portman published an op-ed in the Financial Times offering to slash farm support, so long as Europe and Japan follow suit.
The U.S. subsidy system, rooted in the Great Depression and most recently ratified by the 2002 Farm Bill, rewards gross output. The farms that churn out the most product — so long as the product in question is one of the Big Five commodities mentioned above by Johanns — grab the most cash. And from 1995 to 2003, reports the stalwart Environmental Working Group, that cash averaged a cool $14.5 billion per year.
Now, the subsidy system is beloved of politically powerful grain-processing giants like Archer-Daniels Midland, because it pushes down the price of the stuff they buy and then resell at a profit (or “add value” to, as in the case of high-fructose corn syrup). Environmentalists tend to hate the system because (among other evils) it encourages farmers to maximize production through the use of fossil fuel-derived fertilizers, which in turn foul up groundwater. (In his 2004 Harper’s essay “The Oil We Eat,” Richard Manning elegantly teases out the environmental impact of government-funded industrial agriculture.)
Why, then, is the Bush Administration, generally friend of industry and foe of environmentalists, breaking ranks?
The Bush Administration finds itself caught between its own lofty rhetoric on free trade and an important political lifeline in the so-called Red States.
Here is Environmental Working Group’s report outlining which states grab the highest level of support, based on the percentage of farms receiving subsidies. It doesn’t take a political scientist to figure out that the states with the highest production of Big Five commodity crops tended to support Bush in the 2000 and 2004 elections.
Arguably, that’s why Bush countenanced the generous commodity subsidies built into the 2002 Farm Bill, which remains in effect today. (Next year, Congress will begin hammering out the 2007 Farm Bill. Not unlike the old Soviet Union, we tend to make ag policy in Five-Year Plans.)
Meanwhile, the very policy that helped Bush win support in the so-called Heartland has been getting him flayed over at the World Trade Organization, global enforcer of his beloved free-trade ideology.
Last year, Brazil, along with other cotton-producing nations like Benin and Chad, filed a complaint with the WTO charging that the United States’ cotton subsidies gave U.S. producers an unfair advantage over competitors in poorer nations. In March, the WTO ruled in Brazil’s favor.
Washington has yet to formally respond, and the subsidy system lurches on. Now Brazil is threatening trade retaliation, further pressuring the U.S. to change its ways.
The USDA’s Johanns appears to be assuring farmers and agribusiness alike that a post-subsidy world could be palatable — so long as the U.S. is able to ram its agriculture surplus down the throats of other nations. At his speech last week, Johanns declared:
95 percent of the world’s population lives outside of the U.S. With agricultural productivity far outpacing consumption in our country, we cannot afford to turn our backs on world trade standards. If we do indeed want to firmly control the shape of future U.S. farm policy, which I certainly believe we do, then we must be bold.
Loosely translated, “agricultural productivity far outpacing consumption in our country” means: we’re producing way too much corn and soy. Rather than stop overproducing stuff that no one really wants, the way forward is to “be bold” — i.e., dump our unwanted stuff on foreign markets, farmers operating in those markets be damned.
Just after the above-quoted paragraph, the USDA chief rolled out his money quote: “We must use the WTO to force open markets for U.S. products.”
As debate over the 2007 Farm Bill draws nearer, the tight spot Bush finds himself in presents an opportunity for environmentalists and small-farm advocates. But as satisfying as it would be to see an absurd subsidy system dismantled, surely we can’t afford to see our fragile farm economy defunded.
Over the next couple of days, I’ll report on efforts to create an agenda for the 2007 Farm Bill that attempts to use our resources to create a sustainable, local-oriented food system, not a machine for producing excess grain in search of a market.
Get Grist in your inbox