WASHINGTON — Congress must consider more
carefully the impact of US farm policy on the developing world,
agriculture experts say in a forthcoming report which argues
that copious subsidies at home may only further impoverish poor
nations and stunt future export markets.
"It’s the furthest thing from their mind,"
said Robert Thompson, one author of a report to be launched on
Thursday by the International Food and Agriculture Trade Policy
Council, a Washington-based group.
That report looks at the footprint of US farm
policy — in the crosshair as Congress writes a new five-year
farm, food aid and public nutrition law — on developing nations.
Even domestic US farm policies reverberate
far and wide, in part because its exports of crops like corn,
soybeans and cotton makes up such a big share of world trade. US
farmers produce 60 percent of world corn exports and 40 percent
of world cotton exports, for example.
Many economists argue those abundant exports,
fueled in part by government subsidies that have tallied around
$20 billion in recent years, depress world prices for some
commodities by at least 10 percent.
"Once has to question the fairness, if not
morality, of policies in high-income countries which reduce the
income-earning potential" of the world’s poor, said Thompson, a
former senior economist at the Agriculture Department and
director of rural development at the World Bank.
Thompson, now an academic, says Congress must
reduce production-linked subsidies for crops which some poor
countries rely on as an export staple for some poor countries,
like cotton and rice, and lower entry barriers for their most
competitive crops, like sugar, citrus and ethanol.
He also wants to see changes to food aid
programs that critics argue distort developing world markets.
Not only is that the high road, he said, it
will pad farmers’ pockets in the long run. If poor countries
can’t compete on world commodity markets, the argument goes,
they won’t grow their economies and will never increase
citizens’ purchasing power and appetite for US exports.
"Anything we do to keep developing countries
down flies in the face of future markets," he said.
Many see the moment as ripe for reform, with
US agriculture enjoying record-high prices driven largely by
mounting demand for corn-based ethanol. That price boom has kept
price-triggered subsidy spending low.
Still, Congress does not seem to be moving
toward dramatic reform, or even embracing the administration’s
plan to increase direct payments and cut some production-linked
supports.
Last week, a House Agriculture subcommittee
voted to extend subsidies from past years and provide an
incentive for the US cotton industry similar to one repealed
after Brazil won a World Trade Organization case against US
cotton subsidies.
Some lawmakers argued the move was a good
step toward a final law that would balance reform with the need
to give farmers a safety net in an increasingly uncertain world.
While it’s too early to tell what the final
farm legislation will look like, Thompson believes the move
"sends completely the wrong message" to the world, which could
augur poorly for world trade talks, and also ignores mounting
pressure at home for reform to boot.
"To the rest of the world, the subcommittee’s action is seen
as yet another example of the United States’ arrogance and
unilateralist approach," Thompson said.