WASHINGTON (IPS)—New U.S. agricultural subsidies benefit big
business while impoverishing poor farmers from developing
countries and they
contradict advice from global institutions like the World Bank and the
International Monetary Fund (IMF), says a development group.
"While the United States calls for
‘trade, not aid’ and elimination of subsidies and tariffs, the 2002
U.S. Farm Bill, which boosts spending 80 percent over the 1996 bill, is
an example of its policy of ‘do as we say, not as we do,’" said a new
report by U.S.-based Food First/Institute for Food and Development
The report, "Giving Away the Farm: The 2002 Farm Bill," details the
law’s impact on small family farmers, trade, and agricultural
sustainability and accuses international trade institutions of hypocrisy
on the issue of subsidies.
The bill provides two-thirds of $190 billion in new money over the
next 10 years to the largest U.S. agribusiness farms that grow export
crops such as cotton, rice, soybeans, and wheat, it adds.
"Though American taxpayers foot the bill, the real cost will be borne
by family farmers around the world," said the report.
The report came days ahead of annual meetings of the World Bank and
the IMF in Washington to discuss a review of debt relief efforts, global
trade issues, ways to improve aid delivery and the trade subsidies of
The report also coincided with growing demands from the two
international organizations that the world’s rich countries dump their
subsidies and that poor countries liberalize trade.
IMF Managing Director Horst Koehler told the Council on Foreign
Relations, a U.S. think tank, that it was near impossible for poor
countries to escape poverty while wealthy nations maintain their massive
agriculture exports subsidies.
"If there is not a substantial change in the industrial countries, I
cannot see these countries coming out of poverty through growth,"
Koehler said Sept. 19.
The same day, World Bank Vice President for Operational Policy, James
Adams, told reporters that one of the Bank’s main goals during the
coming meetings is to stress to rich countries that they need to cut
their subsidies if poor countries are ever to develop.
The World Bank said that rich nations spend some $300 billion on farm
support compared to $50 billion on overseas development assistance.
The United Nations Development Program estimates that U.S. farm
subsidies alone cost poor countries about $50 billion a year in lost
"Fifty billion in and $50 billion out," said Anuradha Mittal,
co-director of Food First and author of the report.
Her group argues agricultural subsidies damage poor countries
primarily by promoting overproduction in wealthy nations. The excess
goods, in turn, push world prices down.
"The farm bill bankrolls the nation’s largest farmers, helping them
grow surplus crops to dump on the world market. The new farm bill pulls
a reverse Robin Hood: robbing the world’s poor to enrich American
industrial agriculture," said Ms. Mittal.
U.S. trade representative, Robert B. Zoellick, acknowledged in July
that poor farmers in the developing world have been hit particularly
hard by rich-country subsidies, but said his nation would slash
subsidies only if the European Union and Japan pledged to do the same.
Food First said that the U.S. agricultural system has been designed
to give U.S. grain-trading giants like Archer Daniels Midland (ADM) and
Cargill an edge in capturing the home markets of developing countries.
With help from institutions such as the World Trade Organization (WTO),
Third World countries are forced to open their markets to U.S.
agricultural exports. With the farm bill depressing prices to below the
cost of production, those firms can out-compete local farmers at the
The result is dumping of subsidized imports on Third World countries,
which collapses local agricultural markets and destroys the livelihoods
of family farmers, while exacerbating hunger and food insecurity, said
It also faults U.S. farm subsidies for hurting U.S. agriculture,
saying that the farm bill bonanza for large producers of commodity crops
"gives away the family farm."
By subsidizing well-heeled agribusiness interests, the bill also
ensures the ongoing exodus of independent family farmers from the land,
In 1930, 25 percent of the U.S. population lived on six million
family farms. Today’s two million farms are home to only two percent of
the population, with eight percent of farms accounting for 72 percent of
sales, the report said.