Although
having an abundance of products to export would be beneficial to our economy,
some ague that we would be doing so at the expense of poorer countries. The following
examples collected from the press illustrate these concerns.
- A forthcoming study by the World Bank and the International Monetary
Fund illustrates some of the distorting effects of subsidies on markets such as
cotton. If world cotton prices were not depressed by subsidies, the number of
people living in poverty in the African nation of Burkina Faso could be cut in
half within six years, according to the study, which notes that subsidies account
for about one-third of the $35,000 average annual income of U.S. cotton farmers.
The per capita income in Burkina Faso is less that $1 a day." ("U.S. Farm Bill
Finds Few Fans Abroad; Increased Subsidies Flout Consensus on Helping Third World
Agriculture" by Paul Blustein; The Washington Post, May 9, 2002, page A24).
- "U.S. policymakers
maintained that the bill would not hamper their efforts to strike a deal with
Europe or other trading partners because Washington will be able to offer a cutback
in its farm spending in exchange for similar concessions, and American farmers
will presumably go along to obtain benefits from market-opening measures by other
countries" ("U.S. Farm Bill Finds Few Fans Abroad; Increased Subsidies Flout Consensus
on Helping Third World Agriculture" by Paul Blustein; The Washington Post, Sunday,
May 5, 2002 pA24).
- "According
to CNN, the European Union was considering challenging the payments before the
World Trade Organization. "The United States is increasing trade-distorting support
for (American) farmers that will harm developing countries. This is what we are
fiercely opposed to," said EU spokesman Gregor Kreuzhuber" ("House passes election-year
farm bill"; CNN.com; May 2, 2002).
- "The
president believes America must play a leadership role in international trade
and that the farm bill must advance this important principle. Not only does the
spending in the final bill live within the limits of the World Trade Organization,
but the legislation also contains a newly created circuit breaker that requires
an automatic reduction in subsidies if we violate our WTO commitments. Thus, we
have finally legislated an assurance of our compliance with our international
trade commitments." "Today, a quarter of U.S. farm income is generated by exports,
which means that access to foreign markets is critical to a thriving agricultural
economy. The administration fought for - and achieved - a farm bill that reinforces
U.S. leadership, benefits our producers and enhances the ability of our producers
to aggressively compete for new markets." ("A Farm Bill Worth Signing" by Larry
Lindsey; The Wall Street Journal; May 14, 2002)
Despite
the objections stated in the above quotes, provisions made under Title III are
designed to comply with international trade obligations under the World Trade
Organization. In addition to making provisions that the United States not exceed
its spending limits, Title III of the 2002 Farm Bill also covers programs that
will be of great benefit to disadvantaged countries, such as the Food for Progress
Program which assists emerging democracies in introducing free enterprise elements
to their agricultural economies, The John Ogonowski Farmer-to-Farmer Program created
to assist participating countries with food production by transferring technical
skills and the Bill Emerson Humanitarian Trust created to meet emergency humanitarian
food needs in developing countries.
Economic
Impact - Domestic
In many of the opinion/editorial articles, there were
objections to what many see as a large government subsidy benefiting a minority
of commercial farms and agribusiness at the expense of smaller, family-owned farms.
- Taxpayers will likely pay out more than $50 billion in additional subsidies
to mainly the richest and largest farms." "In pursuing farm votes and agribusiness
campaign money, Congress not only hits up taxpayers for more money. It also continues
the destructive practice of keeping farmers on the dole and throws fiscal discipline
to the wind." ("Big Farmers Reap Big Subsidies", The Christian Science Monitor,
April 29, 2002).
- "According to Rep. Pat Toomey (R-PA), the farm
bill is "a step toward Soviet-style agriculture. We're in danger of turning farmers
into dependent serfs of the federal government." ("House Passes Election-Year
Expansion in Farm Subsidies" by Dan Morgan, Washingtonpost.com; May 2, 2002).
- "The House Republican leadership claims to believe in limited government.
The Senate Democratic leadership claims to believe in balancing the budget. Yet
the two have conspired to produce a shockingly awful farm bill that will weaken
the nation's finances." ("Stop the Farm Bill", The Washington Post, pA22, May
2, 2002).
- According to Larry Lindsey, assistant to the president
for economic policy and director of the National Economic Council, "The final
bill adheres to congressional budget guidelines available at the time of conference,
advances our international trade commitments, and protects the fundamental reforms
in the 1996 Freedom to Farm legislation. The president was committed to a bill
that meets the needs of farmers. He and Congress agree that America's farmers
and ranchers are vital to our economy. As such, the congressional budget resolution
called for, and the administration agreed to, a 10-year spending increase of $73.5
billion on farm programs." In addition, "the administration insisted that the
bill adhere to responsible budget limits and that it avoid any front-loading.
The final bill achieved both objectives. The five-year budget cost of the bill
was scored at $36.6 billion, 29% less than what the Senate passed." ("A Farm Bill
Worth Signing" by Larry Lindsey, The Wall Street Journal, pA18, May 14, 2002).
In
response to general taxpayer concerns, Title I of the Farm Bill imposes payment
limits and set an income cap on eligibility for participation. Title I also creates
a new commission to study and make recommendations regarding pay limitations and
observe these policies impact on land values, farm income and agribusiness infrastructure.
For those who raise concerns regarding the impact on smaller, family-owned farms,
Title V established a pilot program that will enable beginning farmers to purchase
farms on a land contract basis.
Quality
of Life Issues
What makes the passage of the 2002 Farm Bill so relevant
to Grange members are the provisions set forth addressing quality of life issues
in rural America, some of which include things like providing incentives for responsible
land stewardship, establishing the dairy price support program and finding alternate
sources of energy.
In
addition to the provisions set forth for conservation, there are those encompassing
telecommunications access, support for rural business and public safety. Some
examples of such programs and incentives include Broadband Service in Rural Areas,
Rural Local Television Broadcast Signal Loan Guarantees and Rural Firefighters
and the Emergency Personnel Grant Program. Reactions in the press to theses provisions
are highlighted by the following observations.
- [The Farm Bill] Establishes the Conservation Security Program, at a cost
of $2 billion, to pay crop farmers for improved environmental practices; the Conservation
Reserve Program, which pays farmers to idle environmentally sensitive land would
increase from $36.4 million to 39.2 million acres; the Farmland Protection Program,
which pays farmers near urban areas to keep their land in production expand by
nearly $1 billion over the decade, a nearly 20-fold increase; the Environmental
Quality Incentives Program, which subsidizes manure cleanup and other improvements
to be quadrupled at a cost of $9 billion over 10 years." ("Highlights of the New
Farm Bill" by the Associated Press, May 3, 2002).
- "Maybe if
the issue at hand had a more dramatic name the media and the American public would
take a serious interest in congressional debates that are in the process of defining
not just the quality of the food we eat but the future of our rural communities,
the environment that surrounds us, and the type of economy our nation chooses
to construct." (The Online Beat by John Nichols, The Nation, May 10, 2002).
- "The Senate farm bill includes a number of critical anti-corporate
and consumer-protection components that need to be safeguarded. Of particular
interest are measures to require country-of-origin labeling on agricultural products
and provide for far more serious examination of where and how food is produced;
programs to aid sustainable agriculture initiatives; and a section proposed by
Sen. Russ Feingold (D-WI), to protect the legal right of farmers to challenge
unsound practices being forced upon them by agribusiness corporations with which
they contract." (The Online Beat by John Nichols, The Nation, May 10, 2002).
Title
II of this bill represents what is the largest investment in conservation efforts
by the federal government in the 70 year history of federal farm programs, 80%
more than what was provided in the 1996 Freedom to Farm Act. By supporting these
efforts, the Farm Bill ensures the quality of life for rural Americans by protecting
valuable farmlands from urban sprawl, protecting wildlife, and promoting responsible
land stewardship.
Political
Motivations
With any large-scale government program, one must be prepared
to deal with some suspicion, cynicism and hostility regarding political motivations.
The 2002 Farm Bill is no exception. In reviewing articles discussing this bill,
there are accusations of the President signing this bill to ensure the future
of the Republican Party. In addition, support from rural and farming states are
vital to the Republicans winning back the senate. ·
- Sen. Richard G. Lugar (R-IN), ranking Republican on the Agriculture Committee,
said the price tag was too high at a time of returning budget deficits and the
war on terrorism. He suggested it was tailored more to parochial, election-year
interests than to the farm economy's long-range needs. "This bill is largely an
attempt to respond politically to deeply felt economic issues in specific states
and districts" where congressional races will be sharply contested, he said."
("Farm Bill Gains Senate Approval" by Dan Morgan, Washington Post, May 9, 2002).
- The Dallas Morning News states that the new farm bill "rains federal
largess on farm-oriented states that will be campaign battlegrounds this fall,
potentially helping Bush in his quest to win back control of the Senate for the
GOP - and giving him a chance to rack up IOUs for his own 2004 re-election effort."
(Bush Signs $190 billion farm bill" by Associated Press, Dallas Morning News,
May 13, 2002).
- "All of this had better help the GOP win the
Senate back this fall, because if it doesn't Mr. Bush will have paid a high price."
("The Farm State Pig-Out", WSJ.com Opinion Journal, May 5, 2002).
-
"Farm subsidies are a splendid example of old-fashioned politics: using public
money to buy votes. It's the quest for popularity and power, and not campaign
contributions, that matters." "Here are the White House and Congress doling out
up to $20 billion a year to satisfy one tiny group of voters, with few (if any)
public benefits. If that's not corruption, what is it?" ("Harvesting Votes" by
Robert Samuelson, The Washington Post, pA21, May 8, 2002).
