Congress must get serious about subsidy reform

Posted: 15 November 2007

An opinion-editorial published in The Atlanta Journal-Constitution, October 28, 2007, by Raymond C. Offenheiser, President of Oxfam America

The US Senate Agriculture Committee last week followed the “lead” of the House of Representatives and ignored the opportunity to make long-overdue changes in US farm policy. In fact, at a time when leadership is desperately needed, the Congress seems unwilling to act.

Every year American taxpayers dole out between $1 billion to $4 billion dollars in subsidies to about 20,000 mostly large-scale cotton farmers. These subsidies are tied to how much cotton a farmer produces, so cotton farmers always grow cotton and Uncle Sam always pays out. And, excess cotton production lowers cotton prices for everyone, from the cotton farmer in Donalsonville, Georgia to the cotton farmer in Kita, Mali.

Agriculture subsidies undermine the majority of our farmers. Ten percent of subsidy recipients get over 75 percent of the subsidies. So, wealthier farmers benefit while smaller, family farmers struggle to stay ahead.

Not only is this unfair, it is in violation of existing trade rules. Just last week, the WTO ruled in a dispute between Brazil and the United States that the US hasn’t done enough to reform its cotton subsidies. If the cotton program doesn’t change, we leave ourselves vulnerable to retaliation from our trade partners and undermine our long-term interests and access to overseas markets.

Unfortunately, the political will to reform these programs has been nonexistent so far. This week, the full Senate will vote on the farm bill; Senators will choose between making needed reforms in our agricultural programs or continuing to subsidize those farmers who need subsidies the least.

Continuing this outdated farm policy also helps to undermine our security interests abroad. West African cotton-producers have an income of about $250 a year. Our cotton subsidies threaten their livelyhoods. Instead of looking to the US to lead efforts to help developing countries create sustainable economies, farmers in these countries now have US farm policy to blame for their inability to make a living and support their families.

A study by economist Dan Sumner and his colleagues at the University of California found that a reform of cotton subsidies could result in additional income for cotton producing households in West Africa that could feed or educate two million children.

Subsidy reform, after all, isn’t just a smart move for taxpayers and our economy; it can also play an important part in our strategy to increase global stability, national security, and restore America’s standing in the world.

Raymond C. Offenheiser is President of Oxfam America, an international development agency based in Boston.