If ever there was a good time to reform America’s widely derided system of farm subsidies, this was the year. The chance came with the renewal of the five-year “farm bill” reports the Financial Times.
Soaring global commodity prices, partly because of government ethanol subsidies, have lifted many farmers above official support price levels, giving them less to lose.
A new Democratic majority, more dependent on urban and suburban than rural votes, took power in Congress in November. The administration of President George W. Bush wants farm subsidy reform as a legacy. Governments around the world have urged the US to cut subsidies to keep the struggling “Doha round” of global trade talks alive.
A coalition of reformers with a variety of grievances assembled. So-called “specialty crop” farmers (fruit, vegetable and nut growers), who now get almost no federal money, feel excluded. Development campaigns such as Oxfam and Bread for the World complain that US overproduction hurts farmers in poor countries. Food companies such as the Grocery Manufacturers’ Association (GMA) argue that US farmers’ subsidies lose them export markets through gumming up trade negotiations.
Environmentalists say that subsidising large-scale agriculture encourages petrol-guzzling farmers to soak America’s soil with chemical pesticides and fertiliser. Nutritionists worry that the ubiquity of high-fructose corn syrup and other corn products are bad for the nation’s health. Fiscal conservatives think the whole thing is a waste of public money.
Read it here: Farm Subsides