Oxfam America

US Must Reform Agricultural Subsidy Program

mborum — 2009-02-08T07:43:07Z

Brazil's decision today to begin moves toward trade-related retaliation against the US is a direct result of the US failure over the past year to make sufficient reforms to its $5 billion-cotton subsidy program, said international agency Oxfam.

Oxfam said that the US is still paying billions of dollars in trade-distorting subsidies to its cotton farmers, despite having lost a WTO case against Brazil in 2005. The US Congress must now make more meaningful reforms to agricultural subsidies in order to comply with international trade rules and to stop harming developing country farmers.

"Trade-distorting subsidies are not just unfair, they are illegal," said Gawain Kripke, senior policy advisor for Oxfam's Make Trade Fair campaign. "With the Farm Bill expiring next year, Congress has the opportunity to reform agriculture policies to ensure that supporting US farmers does not undermine the livelihood of millions of poor farmers in Africa and other developing countries."

In 2005, the WTO ruled that US cotton subsidies harmed Brazilian cotton farmers and violated WTO rules. It gave the US until September 2005 to reduce its trade distorting subsidies. Today, Brazil has asked for a WTO "compliance panel" to determine whether the US has done enough to comply with the ruling. The panel has 90 days to make its decision.

"It should be little surprise that a new global trade agreement – the Doha Round - has stalled considering that the US has failed to abide by rules of the last agreement," said Kripke. "Brazil is certainly within its rights to pursue sanctions, especially since the US refused to negotiate serious reforms to US cotton subsidies."

In June 30, 2005, the US Department of Agriculture partly reformed US export credit programs to comply with the ruling, while the US Congress eliminated Step 2 payments at the beginning of this year, which took effect last month. But these programs represent only 10% of the cotton subsidy program and some of the most trade distorting programs, like the counter cyclical payments were left untouched. The US continues to pay billions of dollars in trade distorting subsidies to the largest of it 25,000 cotton producers. In 2005, US cotton subsidies reached almost $5 billion for a crop that was worth less than $4 billion. These subsidies help to depress world cotton prices, hurting developing country cotton farmers including more than 20 million African farmers who rely on cotton for their livelihood.

"The case against trade distorting US subsidies has been proven again and again but US taxpayers are still doling them out, increasing the wealth of the biggest producers, encouraging overproduction and undermining production in developing countries," said Kripke. "But even as Brazil is pushing forward on retaliation, some vested interests and their ready and willing friends in Congress, are calling for a Farm Bill extension to protect the gargantuan amount of taxpayer subsides that go overwhelmingly to a small group of large farming operations."

The suspension of Doha Round negotiations cannot be used as an excuse to delay reforms of the Farm Bill. Oxfam warns that the Brazil cotton case demonstrates how trade distorting US farm programs are vulnerable to challenge. New litigation at the WTO on other commodities, such as rice or corn, may be brought if reforms are not made.

For example, the US has paid over $25 billion to corn farmers over the past five years for a crop that would otherwise have lost $20 billion over the same period. Those subsidies have depressed world prices and caused losses of up to $4 billion for countries like Argentina, Paraguay, and South Africa. Rice farmers in the US receive over a billion dollars a year in subsidies, which equals the total value of the US crop. Major rice exporters such as Guyana, India, Suriname, Thailand, and Uruguay could all have strong claims against the US.

"The WTO mechanism for settling trade disputes is an expensive, complicated option of last resort," said Kripke. "Poor countries shouldn't have to seek development through litigation, but with the collapse of the Doha round and the unwillingness of the US to take its international obligations seriously, litigation is one of the few options available."

Peru Trade Deal Fails to Deliver on Development Potential

mborum — 2009-02-08T07:43:06Z

WASHINGTON — International aid organization Oxfam expressed concern in today’s passing of the US-Peru Free Trade Agreement by the US House of Representatives, an agreement it says would do more harm than good for millions of Peruvians who live in poverty.

The modifications negotiated by the Democratic leadership after the agreement was signed and now included in the text take important steps toward making trade work for people living in poverty but remain insufficient to overcome the agreement’s adverse effects on development and poverty reduction in Peru, according to Oxfam. In its current form, this agreement still fails to address development needs as one of its core objectives.

“While trade could be an engine to pull millions out of poverty, this agreement will institutionalize an uneven playing field between the US and Peru,” said Raymond C. Offenheiser, president of Oxfam America. "Although we appreciate the House leadership’s determination to make this agreement better, provisions on agriculture, investment and intellectual property still do not add up to a good deal for farmers, workers and consumers in Peru."

According to Oxfam and other civil society leaders, the agreement fails to take into account US agriculture subsidies, meaning that Peru's small farmers will face massive dumping of subsidized farm products on their market.

“By fully opening Peru’s markets to subsidized US agricultural products, this trade agreement will destroy our domestic agriculture, threaten our food security and increase social problems,” said Luis Zúñiga, president of the National Convention of Peruvian Agriculture (Conveagro). “Farmers’ demands for greater public investment in and modernization of the agricultural sector have gone unmet over many years, but now our needs will be far greater and the threat to our livelihoods far worse.”

The agreement makes it easier for foreign investors to operate in Peru, but it also leaves the government with a weakened ability to enact or enforce its own laws on public health, safety, and the environment. In addition, modifications made on intellectual property remain insufficient to enable Peru to promote access to affordable medicines for all.

“Oxfam welcomes the significant achievement by Congressional leaders to reduce the onerous requirements for intellectual property protections for pharmaceuticals in the agreement, as it will make a real difference in preserving access to affordable medicines, a critical need for the poor,” said Offenheiser. “But more is needed on the intellectual property front and others, to really turn this into a pro-development deal.”

Nearly half of Peru’s 28 million inhabitants live in poverty, the majority of them in rural areas. Agriculture is the main source of income in rural areas and generates nearly a third of all employment nationally. About 90 percent of land under cultivation is dedicated to basic crops that supply the domestic market, like rice, wheat, corn, barley, and cotton.

“The trade agreement’s adverse effects on Peruvians will outweigh its limited benefits, which will primarily accrue to a limited group of exporters, whose current duty-free access to the US under the Andean Trade Preferences Act will be made permanent, continued Offenheiser.

Oxfam says U.S. must reform illegal cotton subsidies, or lose credibility, following WTO panel ruling

mborum — 2009-02-08T07:43:03Z

WASHINGTON — The United States must act immediately to reform its trade distorting cotton subsidies, otherwise its credibility as an international trading partner will be undermined, and significant damage will be done to the multilateral trading system, said Oxfam today in response to a WTO panel ruling that confirmed that the U.S. has failed to reform its program sufficiently.

Oxfam said that the U.S. is still paying billions of dollars of such subsidies to its cotton farmers, despite having lost a WTO case against Brazil in 2005, with no encouraging signs of reform coming from the U.S. Congress. There is little time for the U.S. Congress to make more meaningful reforms to agricultural subsidies in order to comply with international trade rules before facing possible retaliation from Brazil.

"This ruling reinforces the need for reductions in U.S. cotton subsidies in both the context of the Doha Round and the 2007 Farm Bill," said Isabel Mazzei, head of the Geneva office of Oxfam International. "The U.S. cannot continue to ignore the WTO and the effects of cotton subsidies on global markets and, ultimately, the livelihoods of poor farmers in the developing world."

In 2005, the WTO ruled that U.S. cotton subsidies violate WTO rules and gave the U.S. until September 2005 to reduce them. In response, the USDA agreed to reform export credit programs to comply with the ruling, and Congress eliminated the Step 2 cotton export subsidy program in 2006. But these programs represent only 10% of the overall cotton subsidy programs and some of the most trade distorting programs, like the counter cyclical payments were left untouched. In September 2006, Brazil asked for a WTO “compliance panel” to determine whether the US has done enough to comply with the ruling. Today, the WTO has confirmed that the U.S. has failed to reform its agricultural subsidies enough to comply.

“Not only did the House of Representatives completely ignore the WTO ruling in passing its version of the 2007 Farm Bill, but it elected to take the brazen step of reinstating subsidies for cotton that were eliminated by the previous Congress, parsing the language to try to slide the subsidy under the WTO screen," said Raymond C. Offenheiser, president of Oxfam America. "Indeed, the cotton lobby, representing about 20,000 mostly large producers, has continued to fare well at the expense of the American taxpayer and family farmers both here and in Africa.”

According to a recent study conducted by Dan Sumner and others at the University of California Davis for Oxfam, reforming U.S. cotton subsidies would increase world cotton prices by 6-14%, resulting in additional income that could feed an additional million children for a year or pay school fees for at least two million children living in extremely poor West African cotton growing households. A typical cotton-producing household in West Africa has about 10 family members, an average life expectancy of about 48 years and an adult literacy rate of less than 25 percent. Cotton is often the only source of cash income for these families who live on less than $1 a day per person.

"The House-passed Farm Bill will not pass muster with the WTO," said Offenheiser. "If the U.S. is unwilling to live up to its international trade commitments, how can it expect other nations to comply with the same rules? It is now up to the Senate to rally the political will to finally align our agricultural programs with these international rules."

Oxfam Calls for Real Farm Bill Reform, Applauds Actions of Senators Lugar and Lautenberg

mborum — 2009-02-08T07:43:01Z

WASHINGTON — On the eve of the 2007 Farm Bill vote in the Senate Agriculture Committee, international agency Oxfam America joined a diverse group of public interest organizations in support of a new vision for a Farm Bill that would deliver real reform for our broken agriculture policy.

The Farm, Ranch, Energy, Stewardship and Health Act of 2007 introduced today by Senate Agriculture Committee Member Richard Lugar (R-IN) and Senator Frank Lautenberg (D-NJ) and cosponsored by Senators Benjamin Cardin (D-MD), Susan Collins (R-ME), Orrin Hatch (R-UT), Robert Menendez (D-NJ), Jack Reed (D-RI), and Sheldon Whitehouse (D-RI) brings about much needed reform to commodity programs and crop insurance that will serve more farmers more fairly and be responsive to regional and national crises that endanger the continuing success of America’s farmers. Not only is this a better deal for farmers and taxpayers, but it would also align our agricultural programs and our international trade obligations.

“The system is broken, and desperately in need of reform,” said Jim Lyons, Oxfam America’s vice president for policy and communications. “Research shows that our subsidies undercut farmers and rural economies at home and abroad.”

All signs from the Senate Agriculture Committee indicate support for a status quo bill that will keep in place trade distorting commodity subsidies and do little to limit handouts to large corporate farms, according to Oxfam. Most egregious are generous provisions for large cotton producers. A recent study conducted by Dr. Daniel Sumner for Oxfam highlighted the direct connection between subsidies and poverty in West Africa. According to the study, additional income that would result from a meaningful reform of the American cotton program could feed up to a million children for an entire year, or send at least two million children to school.

“American cotton operations fare quite well in the current system, with a mere 7,000 subsidy recipients receiving 55 percent of commodity benefits every year,” said Lyons. “Just last week, the World Trade Organization ruled that we have not done enough to reform our cotton program in a long standing case, it’s good to know at least some Senators are paying attention today.”

Oxfam joins organizations from both sides of the political spectrum, including the Environmental Working Group, Council for Citizens Against Government Waste, the National Taxpayers Union, Taxpayers for Common Sense, Environmental Defense, the National Urban League, and Physicians Committee for Responsible Medicine.

“Oxfam salutes the effort led by Senators Lugar and Lautenberg to re-align our farm programs to honor our international trade obligations—not to mention our responsibility to family farmers here and abroad,” said Lyons. “Oxfam will work to help reform minded senators bring about meaningful change when the legislation is brought to the Senate floor.”

“Investing new money in nutrition, conservation and minority farmer programs is critical but alone is not enough to halt the devastating effects of not reforming our commodity subsidies will have on farmers and rural communities at home and around the globe,” said Lyons about the proposed Senate Agriculture Committee bill. “There’s only a short time left for the Senate to muster the political will to deliver deep and serious reform that that will best serve America and our standing in the world for years to come.“

Major Ad Campaign Launched by Public Interest and Religious Groups to Call on Congress to Deliver a Fair Farm Bill

mborum — 2009-02-08T07:42:58Z

WASHINGTON — A diverse group of taxpayer watchdogs, environmental and social justice organizations and faith groups joined to launch a major ad campaign today calling on Congress to stop putting millionaire farmers ahead of America’s family farms in the 2007 Farm Bill. The television and print ad campaign includes an aggressive $225,000 media buy in Minnesota, New Hampshire and Washington, DC.

The hard-hitting ads set up a direct contrast between the millionaire farmers that benefit most from the Farm Bill, versus small family farmers who are left out in the cold.

“The ball is clearly in the Senate’s court now and they need make the Farm Bill fair,” said Liam Brody, Farm Bill Campaign Director at Oxfam America, which paid for the campaign. “Our campaign asks Senators to stop handouts to millionaires who need it least, and instead help family farms that need it most.”

According to the Environmental Working Group (EWG), which also endorsed the ad campaign, 67% of all farmers and ranchers do not collect government subsidy payments in United States. Among subsidy recipients, 10% collected 73% of all subsidies, amounting to $120.5 billion over 11 years.

"The billions of dollars in payments to profitable big farm operations leave only table scraps for small family farmers. Partly financed by federal subsidies, these large operations now have the capitol to outbid smaller farmers for land,” said Ken Cook, President of EWG. “Large farms grow larger, and rural America dries up in the process. Is this government subsidized consolidation in the agriculture sector in the best interest of American taxpayers?"

The first wave of the ad campaign was launched with TV buys in New Hampshire and Minnesota today and print ads in several Washington, DC publications, including The Hill and Congress Daily last week. In both Minnesota and New Hampshire, the Farm Bill is becoming a hot-button political issue, with decisions made by voters having national implications in Senate and Presidential elections.

“The Senate now faces a real test of moral leadership in changing unjust policy that bolsters millionaires at the expense of struggling family farms and people living in poverty at home and abroad,” said Rev. Jim Wallis, Editor and Executive Director of Sojourners/Call to Renewal. “This ad campaign strives to let them know we’re watching.”

“Our members agree that the current commodities programs exacerbate land consolidation and the deterioration of our natural resources, encourage overproduction and create a structure of agriculture that has benefited few, while leaving most producers working harder for less,” said Land Stewardship Project Policy Organizer Adam Warthesen. “Taxpayer dollars would better be used for conservation programs that encourage farmers to be better stewards of the land.”

This farm bill stinks of rotten programs and taxpayer waste," said Ryan Alexander, President of Taxpayers for Common Sense. "We have joined in this effort to make sure Senators know that they need to clean up farm programs, making them market oriented, less costly and trade compliant."

The campaign was endorsed by Oxfam America, Church World Service, Citizens Against Government Waste, Environmental Working Group, Land Stewardship Project, Progressive National Baptist Convention, National Catholic Rural Life Conference, NETWORK, Sojourners/Call to Renewal, and Taxpayers for Common Sense.

Farmers of Color Shut out from Farm Bill Programs

lmcfarlane — 2009-02-08T07:42:55Z

Washington, DC — Current US farm policies effectively exclude farmers of color from any real benefits according to international agency Oxfam America. Highlighting the point, a diverse group of American farmers, as well as representatives from the Farm and Food Policy Diversity Initiative and Oxfam, descended on Washington today to call on Congress to write a more equitable Farm Bill. The House Agriculture Committee began deliberations on the bill this week.

Under the current system, African-American, Hispanic, Asian and American Indian farmers receive fewer, or often no, benefits from US farm programs when compared to their white counterparts, according to a new report drawn from research by the Tuskegee University and the University of Minnesota and released by Oxfam today. A legacy of discrimination, which resulted in a 97 percent decline in African-American farm ownership between 1920 and 2002, persists today. Producers of color are effectively shut out from US farm programs due to program designs that favor large-scale, commodity growers and large land-holdings, at the same time that they continue to receive inequitable treatment at the local level when seeking to access farm programs and services. In fact, minority farmers receive only one percent of all commodity payments, according to the Oxfam report.

“All farmers, young and old, white or black, should be on a level playing field, but that’s not what we see today, with so many of the commodity subsidies going to the biggest producers,” said Candice Wright, an African American farmer from Bladenboro, NC who came to Washington, DC for the release of the report. “With this new Farm Bill, we have the opportunity to put in place policies to help minority farmers be more viable.”

In the case of African-American farmers, 18 percent received government payments according to the report, compared to 34 percent of white farmers. And on average, white farmers received more than 2.5 times the amount going to African-American farmers—$9,300 compared with $3,460.

“I look forward to the day when the market provides a fair price for our grain, commodity programs are eliminated, and the USDA provides the needed oversight at the local county offices to ensure that programs and services are provided to all,” said Lloyd Wright, an African-American farmer who grows corn, wheat and soybeans with his brothers in the Northern Neck of Virginia and was the former Director of the USDA Office of Civil Rights.

“Reforming the Farm Bill will benefit many struggling farmers in my area,” said Victor Almazán, a second-year, immigrant farmer at the Agriculture and Land-Based Training Association’s Small Farm Incubator in Salinas, California. “I have come to Washington to represent their needs, and I hope that Congress will hear us.”

Despite decades of unfair treatment of farmers of color, there are signs of hope. Farmers of color have been on the land since before the founding of this country, and despite extreme social and economic hardships they continue to survive. The 2002 Census indicates that the number of Hispanic farmers continues to grow, mirroring the overall increase in the number of Hispanic residents in the US. The 2007 Farm Bill will play a role in determining if these new-entry farmers and other long-time producers of color will have future opportunities to make a living in agriculture.

“It’s about time for real resources to be directed to fill existing gaps and assure program access to help producers of color stay on the land and contribute through viable operations to their often low-income communities,” said Savonala Horne, executive director of the Land Loss Prevention Project and chairperson of the Farm and Food Policy Diversity Initiative, a diverse collaboration of organizations representing people of color farmers, rancher, farm workers and urban food system advocates whose farm bill platform has been endorsed by over 70 organizations. “Such reform would be real rural development.”

“The current Farm Bill is not working, particularly for minority farmers,” said Minor Sinclair, director of Oxfam America’s US regional programs. “Members of Congress should get to work to reform commodity programs and invest resources in programs help minority farmers, as well as feed the poor, conserve natural resources, and support rural economies. Change is possible, if Congress finds the political will to stand against the status quo and end the discrimination and inequities associated with our farm programs.”