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America’s Farm Subsidies and the World Economy

The United States produces a great deal of food each year. Actually, it overproduces food. This is the result of federal farm policies that pay farmers by the amount of crop they produce each year. This results in lower prices for grains, not only in America, but around the world. And the rest of the world isn’t happy about it. So why should I care what the rest of the world thinks? The main reason is national security. It takes a while to get there, but stick with me.

The overproduction of any commodity results in the lowering of the price. It is simple supply and demand. In America, the farmer is compensated with subsidies if the market is low. However, farmers in other countries are not. While he was President of the World Bank, Paul Wolfowitz called for the end of subsidies because of the negative effects they had on poor nations. He understood what I am going to explain to you:

Mr Wolfowitz increased pressure on the industrialised world when he said the temporary discomfort of industrialised countries in getting rid of farm subsidies was “nothing compared with the daily discomfort and deprivation faced by the world’s poorest people”.

What kind of effect could our farm policy have in other countries? Take cotton in Africa for instance. The San Francisco Gate covered the effects of the cotton subsidies both here and in Africa:

…because federal farm policy ensures that farmers get subsidies for each bale of cotton that they produce, cheap U.S. cotton exports glut the market and depress world prices, triggering tens of millions of dollars in subsidy checks to wealthy growers. So every year, 12,000 mostly large-scale cotton producers representing less than 1 percent of America’s farms, get up to $3 billion in government handouts. A quarter of cotton subsidies go to the top 1 percent of recipient farmers, reaching upward of $500,000 per farm.

Our farmers are covered by subsidies, even though those subsidies were what motivated farmers to plant cotton the market couldn’t handle, which lowered the price of cotton. But what about the poor farmers in Africa:

Mali’s farmers, many of whom live on a dollar a day, are largely dependent on cotton to support their families. The poverty was jarring. Many of these farmers are illiterate, but they are well aware of the huge subsidies our government pays cotton growers at a time when their government recently removed agricultural price-supports in the lead- up to privatization of the Malian cotton industry in 2008, as prescribed by the World Bank.

A recent study by Dan Sumner at UC Davis found that reforming cotton subsidies would increase world cotton prices, resulting in enough income for poor West African cotton-growing households to feed an additional million children a year. The price-deflating effects of our cotton subsidies now substantially offset the benefits of direct U.S. aid sent to West African countries. So instead of promoting sustainable economies, current policies foster dependence on foreign aid, increased economic instability and resentment of the United States.

Let’s try to think about this and not get upset or staggered by the results of our farm policy. Our overproduction results in lower prices of cotton in Africa, where they do not subsidize their crop. This means African farmers don’t make as much money and their children suffer. Because we are a compassionate country, and it really isn’t their money anyway, the federal government sends millions of dollars in aid to help the poor farmer. But the farmer could possibly feed his children if we weren’t already giving away money to our farmers. So, basically, we are subsidizing farmers in America and Africa. While I find this upsetting, it isn’t nearly as upsetting as the cotton farmer who can’t make enough to feed his kids because of corporate welfare in America.

But it isn’t just cotton.

The New York Times notes the effect we are having on corn in Mexico:

The flow of immigrants north from Mexico since NAFTA is inextricably linked to the flow of American corn in the opposite direction, a flood of subsidized grain that the Mexican government estimates has thrown two million Mexican farmers and other agricultural workers off the land since the mid-90s. (More recently, the ethanol boom has led to a spike in corn prices that has left that country reeling from soaring tortilla prices; linking its corn economy to ours has been an unalloyed disaster for Mexico’s eaters as well as its farmers.) You can’t fully comprehend the pressures driving immigration without comprehending what U.S. agricultural policy is doing to rural agriculture in Mexico.

Now our farm subsidies are resulting in illegal immigration. What next? How about anti-government groups in the Philippines? When the Philippines joined the World Trade Organization, they expected to compensate for a lack of sophisticated equipment with inexpensive labor and still be able to compete on a global scale. They had planned on increasing the number of farmers by 500,000 or more a year. They planned on free trade and the free market. Then they met our protected class:

Instead of making any gains, the Philippines has lost hundreds of thousands of farming jobs since joining the
W.T.O. Its modest agricultural trade surpluses of the early 1990’s have turned into deficits. Filipinos, who like referring to their history as a Spanish and American colony as “three centuries in the convent followed by fifty years in Hollywood,” increasingly view the much-promoted globalization as a new imperialism. Despair in the countryside feeds a number of potent anti-government insurgencies. (Emphasis mine.)

And we want to preach to the rest of the world about the benefits of free markets and free trade? It boggles the mind.

Here’s one last thing to consider. If these countries were making more, they would be healthier also. It is common knowledge that wealthier is healthier. Ask the universal health care proponents. According to the National Center for Policy Analysis:

Many human-health and environmental problems might be remedied with proceeds from growth in the agricultural sector. For instance, developing countries would have more funds to provide safe water sources; every year, 2.5 million people perish from dysentery and other intestinal diseases due to lack of clean drinking water.

Countries could also afford better medical care and access to tools to fight diseases. For example, more than 2 million people, mostly in sub-Saharan Africa and Asia, die from malaria each year due to lack of access to effective pesticides like DDT and the high costs of effective malaria treatments. In Uganda alone, malaria kills about 400 people per day.

Additional revenues from agriculture would also allow poor countries to invest in the infrastructure necessary to deliver electricity and natural gas to rural areas. Millions of Africans die each year from cardiovascular diseases caused in part by poor indoor air quality, often a direct result of burning dung and wood for cooking fires and heat. Acute lower respiratory infections claim 4.5 million lives per year, mostly in the Third World.

Generally, the death of a loved one is upsetting. This also contributes to animosity towards the United States.

All of this anger towards us is easily manipulated by the enemies of America. The young people of Third World countries are prime real estate for terrorists looking for recruits. They preach that America is trying to keep the rest of the world poor, that we are trying to oppress people by destroying agriculture in Third World countries. Reason Magazine notes:

Indeed, in a survey of anti-American sentiment around the world, the Pew Research Center found a majority of respondents in more than a dozen countries were convinced that U.S. farm and trade policies increased the “poverty gap” worldwide. These sentiments transcended geographic, ethnic, or religious boundaries. In such an environment, terrorist ringleaders find fertile ground for their message of hate and violence.

The New York Times agrees:

Sure, poverty doesn’t cause terrorism — no one is killing for a raise. But poverty is great for the terrorism business because poverty creates humiliation and stifled aspirations and forces many people to leave their traditional farms to join the alienated urban poor in the cities — all conditions that spawn terrorists.

We should not continue to talk the talk, yet not walk the walk. If just for humanitarian reasons, we should stop the federal farm subsidy program from limiting the life spans of millions of people in Third World countries. It seems a stretch to think that our corporate welfare scheme results in malarial deaths in Africa, or anti-government groups in the Philippines, but the connection is there. Our policies have adverse effects on other countries which results in animosity towards our nation. This results in an increase in volunteers to fight and die against the entity they see as the cause of their misery. Instead of giving them an excuse, we should just give them an equal playing field and a little respect. And a chance to compete. It’s in our best interest.


Tomorrow:
What Happens If We Abolish Farm Subsidies

(This is part four of a five part series. Here are parts one, two and three.)

Duane Lester is an ex-Navy journalist turned blogger and podcaster. He is the lead writer and editor for All American Blogger. You can also find him on StumbleUpon, Facebook, Twitter, LinkedIn, Blog Talk Radio and Newsvine. You can contact him by clicking the "E-mail this Author" button below.
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