Wednesday, November 07, 2007

More on Subsidies; articles from American Newspapers

Hi Folks,
I’ve put together some good articles that have come out during the past week about the Farm Bill debate and its implication in world poverty. Click on read more to get them all.
Any comments????

NYTimes Weed It and Reap By MICHAEL POLLAN
Washington Post Cotton and Conscience By Michael Gerson
Miami Herald A chance to end farm subsidies The Christian Science Monitor; Farmers deserve better
The Wall Street Journal Editorial. Farm Belt Follies

Op-Ed Contributor
Weed It and Reap
Berkeley, Calif.

FOR Americans who have been looking to Congress to reform the food system, these past few weeks have been, well, the best of times and the worst of times. A new politics has sprouted up around the farm bill, traditionally a parochial piece of legislation thrashed out in private between the various agricultural interests (wheat growers versus corn growers; meatpackers versus ranchers) without a whole lot of input or attention from mere eaters.
Not this year. The eaters have spoken, much to the consternation of farm-state legislators who have fought hard — and at least so far with success — to preserve the status quo.
Americans have begun to ask why the farm bill is subsidizing high-fructose corn syrup and hydrogenated oils at a time when rates of diabetes and obesity among children are soaring, or why the farm bill is underwriting factory farming (with subsidized grain) when feedlot wastes are polluting the countryside and, all too often, the meat supply. For the first time, the public health community has raised its voice in support of overturning farm policies that subsidize precisely the wrong kind of calories (added fat and added sugar), helping to make Twinkies cheaper than carrots and Coca-Cola competitive with water. Also for the first time, the international development community has weighed in on the debate, arguing that subsidized American exports are hobbling cotton farmers in Nigeria and corn farmers in Mexico.
On Capitol Hill, hearings on the farm bill have been packed, and newspapers like The San Francisco Chronicle are covering the legislation as closely as The Des Moines Register, bringing an unprecedented level of attention to what has long been one of the most obscure and least sexy pieces of legislation in Congress. Sensing the winds of reform at his back, Senator Tom Harkin of Iowa, chairman of the Senate Agriculture Committee, told a reporter in July: “This is not just a farm bill. It’s a food bill, and Americans who eat want a stake in it.”
Right now, that stake is looking more like a toothpick. Americans who eat have little to celebrate in the bill that Mr. Harkin is expected to bring to the floor this week. Like the House bill passed in July, the Senate product is very much a farm bill in the traditional let-them-eat-high-fructose-corn-syrup mold.
For starters, the Old Guard on both agriculture committees has managed to preserve the entire hoary contraption of direct payments, countercyclical payments and loan deficiency payments that subsidize the five big commodity crops — corn, wheat, rice, soybeans and cotton — to the tune of $42 billion over five years.
The Old Guard has also managed to add a $5 billion “permanent disaster” program (excuse me, but isn’t a permanent disaster a contradiction in terms?) to help farmers in the High Plains struggling to grow crops in a drought-prone region that, as the chronic need for disaster aid suggests, might not be the best place to grow crops.
When you consider that farm income is at record levels (thanks to the ethanol boom, itself fueled by another set of federal subsidies); that the World Trade Organization has ruled that several of these subsidies are illegal; that the federal government is broke and the president is threatening a veto, bringing forth a $288 billion farm bill that guarantees billions in payments to commodity farmers seems impressively defiant.
How could this have happened? For starters, farm bill critics did a far better job demonizing subsidies, and depicting commodity farmers as welfare queens, than they did proposing alternative — and politically appealing — forms of farm support. And then the farm lobby did what it has always done: bought off its critics with “programs.” For that reason “Americans who eat” can expect some nutritious crumbs from the farm bill, just enough to ensure that reform-minded legislators will hold their noses and support it.
It’s an old story: the “hunger lobby” gets its food stamps so long as the farm lobby can have its subsidies. Similar, if less lavish, terms are now being offered to the public health and environmental “interests” to get them on board. That’s why there’s more money in this farm bill for nutrition programs and, for the first time, about $2 billion to support “specialty crops” — farm-bill-speak for the kind of food people actually eat. (Since California grows most of the nation’s specialty crops, this was the price for the state delegation’s support. Cheap indeed!)
There’s also money for the environment: an additional $4 billion in the Senate bill to protect wetlands and grasslands and reward farmers for environmental stewardship, and billions in the House bill for environmental cleanup. There’s an important provision in both bills that will make it easier for schools to buy food from local farmers. And there’s money to promote farmers’ markets and otherwise support the local food movement.
But as important as these programs are, they are just programs — mere fleas on the elephant in the room. The name of that elephant is the commodity title, the all-important subsidy section of the bill. It dictates the rules of the entire food system. As long as the commodity title remains untouched, the way we eat will remain unchanged.
The explanation for this is straightforward. We would not need all these nutrition programs if the commodity title didn’t do such a good job making junk food and fast food so ubiquitous and cheap. Food stamps are crucial, surely, but they will be spent on processed rather than real food as long as the commodity title makes calories of fat and sugar the best deal in the supermarket. We would not need all these conservation programs if the commodity title, by paying farmers by the bushel, didn’t encourage them to maximize production with agrochemicals and plant their farms with just one crop fence row to fence row.
And the government would not need to pay feedlots to clean up the water or upgrade their manure pits if subsidized grain didn’t make rearing animals on feedlots more economical than keeping them on farms. Why does the farm bill pay feedlots to install waste treatment systems rather than simply pay ranchers to keep their animals on grass, where the soil would be only too happy to treat their waste at no cost?
However many worthwhile programs get tacked onto the farm bill to buy off its critics, they won’t bring meaningful reform to the American food system until the subsidies are addressed — until the underlying rules of the food game are rewritten. This is a conversation that the Old Guard on the agriculture committees simply does not want to have, at least not with us.
But its defiance on the subsidy question may actually be a sign of weakness, for one detects a note of defensiveness creeping into the rhetoric. “I know people on the outside can sit and complain about this,” Representative Collin Peterson of Minnesota, chairman of the House Agriculture Committee, told The San Francisco Chronicle last summer. “But frankly most of those people have no clue what they’re talking about. Most people in the city have no concept of what’s going on here.”
It seems more likely that, this time around, people in the city and all across the country know exactly what’s going on — they just don’t like it.
Mr. Peterson’s farm bill passed the House by the smallest margin in years, and might have been picked apart on the floor if Representative Nancy Pelosi, the speaker of the House, hadn’t leapt to its defense.
(She claimed to be helping freshmen Democrats from rural districts.)
But Senate rules are different, and Mr. Harkin’s bill will be challenged on the floor and very possibly improved. One sensible amendment that Senator Byron Dorgan, Democrat of North Dakota, and Senator Chuck Grassley, Republican of Iowa, are expected to introduce would put a $250,000 cap on the payments any one farmer can receive in a year. This would free roughly $1 billion for other purposes (like food stamps and conservation) and slow the consolidation of farms in the Midwest.
A more radical alternative proposed by Senator Richard Lugar, Republican of Indiana, and Senator Frank Lautenberg, Democrat of New Jersey, would scrap the current subsidy system and replace it with a form of free government revenue insurance for all American farmers and ranchers, including the ones who grow actual food. Commodity farmers would receive a payment only when their income dropped more than 15 percent as the result of bad weather or price collapse. The $20 billion saved under this plan, called the Fresh Act, would go to conservation and nutrition programs, as well as to deficit reduction.
What finally emerges from Congress depends on exactly who is paying closest attention next week on the Senate floor and then later in the conference committee. We know the American Farm Bureau will be on the case, defending the commodity title on behalf of those who benefit from it most: the biggest commodity farmers, the corporations who sell them chemicals and equipment and, most of all, the buyers of cheap agricultural commodities — companies like Archer Daniels Midland, Cargill, Coca-Cola and McDonald’s.
In the past that alliance could have passed a farm bill like this one without breaking a sweat. But the politics of food have changed, and probably for good. If the eaters and all the other “people on the outside” make themselves heard, we just might end up with something that looks less like a farm bill and more like the food bill a poorly fed America so badly needs.
Michael Pollan, a contributing writer at The Times Magazine and a professor of journalism at the University of California at Berkeley, is the author of “The Omnivore’s Dilemma” and the forthcoming “In Defense of Food: An Eater’s Manifesto.”

Cotton and Conscience
By Michael GersonWednesday, November 7, 2007; A21
In land area, the four West African countries of Benin, Burkina Faso, Chad and Mali are about 1 1/2 times the size of the southern United States. Together, they have roughly the economic output of greater Charleston, S.C. And when the American economic giant shuffles its feet, these distant lands feel the earthquake.
Cotton provides an example. For years, the federal government has guaranteed American cotton producers about 72 cents a pound, even though the real market price of cotton has averaged about 57 cents. The more cotton U.S. growers produce, the more they get from the government in subsidies. Since 2002, market prices haven't even covered the cost of producing cotton, but the amount of acres planted in cotton has increased because the government guarantees a higher price.
Most Americans hardly notice this economic distortion and perhaps chalk it up to typical, interest-group politics. But the effects in the cotton-growing regions of West Africa are dramatic. American subsidies result in overproduction, which depresses the global price of cotton, which keeps millions of Africans on the edge of malnutrition. In some of the poorest countries on Earth, cotton farmers are some of the poorest people, earning about a dollar a day. The typical cotton-producing household has 10 members. About 40 percent of children under 5 are malnourished.
Who benefits from the current system of subsidies? About 20,000 American cotton producers, with an average annual income of more than $125,000 -- a portion of which goes to hire lobbyists. And these lobbyists do their work well. Even after the World Trade Organization in 2005 found U.S. cotton supports to be illegal, Congress made only cosmetic changes in policy. And recently the compliance panel of the WTO reaffirmed that America remains in violation.
Who would benefit from a reform of subsidies? A recent report by Oxfam America, " Paying the Price," estimates that family incomes for perhaps 10 million people in West Africa would increase by 2.3 to 5.7 percent. This extra cash would feed an additional 1 million children a year, or pay the school fees for 2 million children, or allow farm families to pay for medicine and buy fertilizer to increase their yields.
An odd alliance has gathered around the cause of reform. Fiscal conservatives such as the nonprofit Citizens Against Government Waste see cotton subsidies as a market-distorting waste of public money -- reducing the target price of cotton from 72 cents to 56 cents and changing the loan rate would save the U.S. government about $1.2 billion a year. Humanitarian and faith-based groups such as Bread for the World see subsidies as an enemy of economic growth in the developing world. Both are correct. They also see this year's farm bill as the chance to reverse an inefficiency that is also an injustice. Both understand it is an uphill fight.
There is a lively intellectual debate on the causes of the most extreme forms of global poverty. In his challenging new book, "The Bottom Billion," Oxford University professor Paul Collier details a range of "traps" that limit the potential of the poorest countries. Many of these countries have experienced internal conflict or are "cursed" by natural resources that distort their development and perversely undermine their growth. Some are landlocked nations without access to regional or global markets, while others suffer under corrupt and incompetent governments.
But whatever the ultimate reasons, at least some of this poverty exists because Congress has not acted in responsible ways on agricultural policy. So a fraction of the blame is our own. The cost to America of reforming cotton subsidies is low -- a mite from a billionaire. The benefit to the world's poorest people is great. As is often the case, bad economics turns out to be bad morality.
It is the nature of American global power that an ignored amendment in a boring agricultural debate can take or save lives in a distant village, among people who will never know the names of Richard Lugar, Ron Kind and Jeff Flake-- members of Congress leading this agriculture debate. But the price of power is moral responsibility. And giving African farmers a chance to earn and live is one of the clearest of those responsibilities.
Michael Gerson is the author of "Heroic Conservatism." His e-mail address

A chance to end farm subsidies
Another disgraceful corporate welfare bill could come to the Senate floor today.
November 5, 2007It's good to be a farmer. With money rolling in as many subsidized crops such as corn, wheat and soybeans command unusually high prices, and with net farm income expected to hit a record this year, the government continues to throw cash at commodity growers. And despite the fact that a large coalition of corporate interests, environmentalists, nutritionists, economists and international anti-poverty groups has been loudly urging an end to this form of corporate welfare, Congress has so far turned a deaf ear.Last month, the Senate Agriculture Committee approved a version of the 2007 farm bill every bit as bloated, unfair and irresponsible as the one passed by the House in July; it's expected to come to the Senate floor today. It will continue to award the bulk of subsidies to the richest growers and send checks to gentlemen farmers in Beverly Hills and Manhattan. It will continue to raise consumer prices for some crops, such as sugar, while distorting trade and wrecking livelihoods in the developing world. And it will waste about $16 billion annually in taxpayer money far better spent elsewhere -- the closest thing to "reform" in the Senate bill is a provision that would cut off payments to households making more than $750,000 a year, apparently under the rationale that farmers who make less than this are clearly in need of government assistance.Farm bill supporters from the handful of Midwestern states that benefit heavily from these subsidies have succeeded largely by buying off their opponents. Because the farm bill also funds food stamps, urban representatives in the House were persuaded to sign on when some $4 billion was added to that program. Lawmakers from states such as California that don't traditionally get much in the way of subsidies acquiesced when extra money was added for conservation, nutrition and specialty crops of the kind grown here, such as tree nuts and vegetables. Yet all of the most destructive provisions of the last five-year farm bill, an outrageous giveaway to agribusiness that continues to damage U.S. trade relationships, remain in place.There is some hope. Sens. Frank R. Lautenberg (D-N.J.) and Richard G. Lugar (R-Ind.) have proposed an alternative called the Fresh Act, which would do away with billions in trade-distorting subsidy payments. Instead, it would expand free crop insurance to farmers with incomes under $250,000 a year, paying off only when they lose money. Unlike the current system, it would benefit all farmers regardless of what they grow, so it could be a boon for California. Democratic Sens. Dianne Feinstein and Barbara Boxer should do the right thing by their state, the nation and the world and back it.

November 3, 2007
Farm Belt Follies
The Senate has one last chance to rid the country of an irrational, outdated and unfair 70-year-old program of federal farm supports that enriches the few at the expense of the many, distorts international trade and damages the environment. It has one last chance, in other words, to produce a farm program of which the country can be proud.

Floor debate on the farm bill begins next week, possibly as early as Monday. The choice facing the Senate lies between an old-fashioned bill produced by the Senate Agriculture Committee and an entirely different bill that is expected to be offered as an amendment by Richard Lugar, the Indiana Republican, and Frank Lautenberg, Democrat of New Jersey.

The old-fashioned bill, which is only marginally better than a similarly retrograde measure approved earlier this year by the House, would perpetuate a system that directs more than half of all farm payments to less than one-tenth of the farms, most of them concentrated in eight states and most of them producers of big row crops like corn, cotton, soybeans, wheat and rice.
To make matters worse, these lucky few get their billions regardless of market conditions — and conditions now happen to be particularly good, given the strong demand for corn-based ethanol as well as for American farm products abroad. So whenever you hear its proponents describe this welfare-for-the-rich program as a safety net, remember this: for the most part, it provides an extra bounce for those who don’t need a safety net while failing to catch those who do.

The Lugar-Lautenberg bill aims to correct this. It would replace existing subsidies with genuine crop insurance that would cover all farms, whether they produce rice or rutabaga. It would save $20 billion over five years. And it would funnel the savings to valuable soil, open space and wetlands preservation programs, as well as the food stamps program — all of which could use the extra help.

The most visible enemies of such a sensible approach are all the farm state legislators from both parties who love things just the way they are. But an equally powerful enemy is plain old Congressional inertia. That makes the Lugar-Lautenberg amendment a long shot, but we hope they give it their best shot.

Farmers deserve better
The House and Senate bills only perpetuate a broken subsidy system. But there is an alternative.

Every five years, Congress rethinks its role in farming. Next week, the Senate debates a bill from its agriculture panel that perpetuates subsidies for a few crops and many well-off farmers. This time, however, it has a fresh choice.

Farming in the US is no longer simply a declining industry that needs a big federal prop-up in the name of "the family farm."

Many other worthwhile nonfarming interests have gained a stake over the years in how government influences the use of millions of farm acres and billions of taxpayer dollars.

Even born-in-the-cornsilk legislators who favor the current bill before the Senate (and a similar one passed by the House in July) have openly questioned the wisdom of traditional subsidies – $16 billion a year – but then they've vote for them anyway under pressure from well-funded farm lobbies.

Their questions start with recent revelations of the many rich farmers and corporations that receive the hefty subsidies.

They start with calls for other, often healthier foods, mainly fruits and vegetables, to also be supported – if there is to be federal support at all – and not just the current, main beneficiaries: corn, wheat, rice, and soybeans.

They start with growing evidence that corn ethanol is a net polluter of greenhouse gases and not worthy of massive subsidies.

They start with the need for better conservation of land, less pollution, and more opportunities for wildlife – which would mean no federal "disaster" support in drought-prone Plains states where commercial farming isn't viable.

They start with a rising public interest in growing and eating locally grown produce, especially if it's organic – and in reducing support for subsidized, highly processed foods.

They start with a US responsibility to trim its farm supports in order to push other nations to do the same and achieve a grand, new global trade pact.

To their credit, a few farmland senators have bucked the lobbyists and are proposing an overhaul of the federal role in farming.

Sen. Richard Lugar (R) of Indiana and Sen. Frank Lautenberg (D) of New Jersey plan to introduce an alternative bill to the one recommended by the Senate Agriculture Committee. It provides a new type of safety net against the ups and downs of climate and markets, but it would eventually end the program that provides direct payments when prices are low to only a few types of farmers.

It would instead provide a type of insurance that would be available to many kinds of crops and would be based on crop revenues calculated on averages. It would end a system in which only about one-third of farmers receive subsidies – and of those, only the top one-fifth get most of the money. And it would end a system in which only seven states – Iowa, Texas, Kansas, Nebraska, Indiana, Minnesota, and Illinois – received more than half of all federal farm supports.

Under the Lugar-Lautenberg bill, more money would go to land conservation and a wider range of healthier foods, while saving the US budget about $3 billion a year.
While it may not be perfect, the bill can serve to push Congress out of its lock-step support of a system created in the Depression, and which needed a radical change soon after it. Now lawmakers have a chance to make up for lost opportunities.