Monday, October 15, 2007

Today’s Harvest of Shame AS Congress heads into final negotiations over the farm bill, let’s hope our elected officials are paying attention to the headlines: Brazil has scored yet another huge victory at the World Trade Organization over America’s cotton subsidies; Mexico is likely to file a complaint with the global body over how we subsidize rice farmers; Canada may do the same over corn payments. This is a troubling pattern, and there’s a good chance America will lose more and more cases unless Congress makes changes in the farm bill, which expired last month. Washington simply must stop subsidizing farmers the way it does or risk reversing course on a half-century of steadily expanding trade opportunities. I know all about subsidies. For years, I took them myself for my corn and soybean farm. I didn’t really enjoy it, but they were available and I rationalized my participation: Other industries received payments and tax breaks — why shouldn’t I? In addition, I spent 14 years as the head of the American Farm Bureau, the leading farmers’ lobby and a prime player in the creation of the subsidy system. In the 1990s, however, a trip to New Zealand made me realize that eliminating subsidies was not just a free-market fantasy, but rather a policy that could work in an advanced industrial nation. New Zealanders had stopped subsidizing their farmers, cold turkey, in 1984. The transition was controversial and not without its rough spots, yet it succeeded. On that visit and several later ones, I never met a farmer who wanted to go back to subsidies. Today, it’s obvious that we need to transform our public support for farmers. Many of our current subsidies inhibit trade because of their link to commodity prices. By promising to cover losses, the government insulates farmers from market signals that normally would encourage sensible, long-term decisions about what to grow and where to grow it. There’s something fundamentally perverse about a system that has farmers hoping for low prices at harvest time — it’s like praying for bad weather. But that’s precisely what happens, because those low prices mean bigger checks from Washington....

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