U.S. agricultural subsidies that make it difficult for farmers in developing countries to eke out a living on the margins well below the poverty line need to be modified. The cry from the developing countries for reduction of farm subsidies in the U.S., Europe, and Japan was the reason for the discouraging collapse of the Doha Round of trade talks in Cancun (Sept. 2003). Unless subsides end, progress towards further liberalization of world trade in the near term is in severe jeopardy. Although this outcome will injure the rich trading nations, it will be the world’s poor who suffer most.

Conventional politics seem to give farm subsidies an exemption, but very recent developments provide an opportunity for change. The WTO recently found against the U.S. and in favor of Brazil on its case against cotton subsidies. While the case is under appeal, its likely confirmation could open the floodgates for further cases against American farm subsidies. The U.S. government should seize the initiative to change now instead of reacting to later rulings, which are unlikely to support a strategy of subsidies.

A Program on International Policy Attitudes (PIPA) poll entitled “Americans on Globalization, Trade, and Farm Subsidies”, dated January 2004 found that the majority of Americans do not favor subsidies to large farming businesses of more than 500 acres. We only favor subsides to small farmers and, even then, only in bad years rather than every year, as is now the case. PIPA found that this point of view held true in agricultural states, as well as in those that are not significantly agricultural. These findings were in spite of the fact that only 27% of Americans appear to be aware of the objections to farm subsidies, based on their impact on developing countries. If the facts about the struggles of farmers in developing countries become public knowledge, it is very likely that the opposition to large farm subsidies would become stronger still. Since 80% of U.S. subsidies go to the large agricultural businesses, there are billions of taxpayer dollars to be saved. The opportunity to provide major improvements in the livelihoods of the world’s poor, and save billions for U.S. taxpayers at the same time is extremely compelling.

Unless agricultural subsides end, progress towards further liberalization of world trade in the near term is in severe jeopardy - and it will be the world’s poor who suffer most.

An April 28, 2004, editorial in The New York Times suggests that the WTO decision that found U.S. subsidies on cotton to be illegal provides political cover for dismantling agricultural subsidies. Along with American opposition to the 80% of agricultural subsidies that go to large farm businesses, the WTO decision provides an opportunity for both parties to do what is right for the U.S. taxpayers and for the world’s poorest farmers. The economies of many developing countries rely heavily on their agricultural products, and the subsidies of the European Union, Japan, and the U.S. create artificial forces that make it difficult for them. While agricultural subsidies in America are less onerous than those of our European and Japanese competitors, our global position makes us the main target of criticism from the developing countries.

Calls for the reduction of agricultural subsidies are being heard from very disparate sources in the U.S. and around the world. The NY Times editorial referred to above called for “the surrender of rich nations’ trade-distorting farm subsidies”. In Seattle a group of prominent business people, led by Bill Clapp, Dan Evans, Bill Gates Sr. and Bill Ruckelshaus, includes reduction of agricultural subsidies in actions endorsed in their position paper, “Building a Better World: A New Global Development Strategy to End Extreme World Poverty”. While from Europe, Oxfam’s Briefing Paper, “Stop the Dumping!” calls for reformation of EU agricultural subsidies.

More recently, the EU’s trade commissioner, Pascal Lamy made a surprising offer to eliminate all export subsidies on farm goods if the U.S., Australia and Canada cut back on their export subsidies. Robert B. Zoellick, U.S. Trade Representative, has indicated willingness to co-operate if the EU does proceed, but the French have created doubt over what the EU will ultimately do by expressing their opposition to Lamy’s statement.

With agricultural subsidies under severe pressure around the world it would be to our advantage, in many ways, to be the world leader in undertaking the needed changes.

What can you do?

• Write your congressperson to convince him/her that you care about the fate of poor farmers in developing countries, and that the recent WTO decision has created momentum to change U.S policy on agricultural polices.
• Share this issue and your thoughts with friends and colleagues, or write a letter to the editor of your local paper.
• Inform yourself about the critical issues of global trade—start online at Global Envision, or attend events at your local college, house of worship, or lecture series.

Contributed by William Early, Senior Vice President, JELD-WEN, inc and Founder of Global Envision.

To read another Global Envision article about eliminating world poverty, see Eliminating Global Poverty is Job One.