Bush Plan to Cut Farm Payouts Met with Praise at Home and Abroad
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WASHINGTON, D.C., Feb 21 (OneWorld) - A diverse array of advocacy groups is expressing hope that proposals in President George W. Bush's budget for fiscal year 2006 and in legislation before the U.S. Senate will help tackle rural poverty in the United States and the developing world.
At issue are federal agricultural subsidies originally designed to boost farm production and then to protect domestic farmers from competitors overseas. ''The current system is broken and is harming farmers both here and abroad,'' said Barbara Fiorito, chair of the board of directors at aid group Oxfam America. ''Farm programs in the U.S. exclude most farmers and disproportionably benefit the largest producers. Despite decades of farm program payments, economic researchers have been unable to establish that these payments help sustain farm-based communities,'' Fiorito said. In turn, she added, ''Handouts to corporate farms lead to overproduction, with the surplus dumped on international markets at prices below production costs. Crop prices are driven down, threatening the livelihood of family farmers across the world.'' Bush's proposed budget for fiscal year 2006--intended to take effect when the new fiscal year begins on Oct. 1, 2005 but subject to approval by Congress--contains surprise cuts to those subsidies. The president would trim agricultural subsidies by five percent and limit subsidy payments to $250,000 per producer. This would mark a huge cut for the 80-plus agribusiness firms that receive more than $1 million a year, according to researchers at the Center for Global Development. ''The potential winners are poor farmers in developing countries who face market prices pushed down by U.S. and European production subsidies,'' the Washington, D.C.-based think tank said in a statement. If the U.S. cuts take effect, then pressure would mount on Europe to follow suit and prospects could improve for global trade talks in which agricultural subsidies have become a key sticking point, said Center president Nancy Birdsall. The second initiative would impose similar caps and is contained in the ''Rural America Preservation Act,'' legislation introduced by Senators Chuck Grassley (R-Iowa) and Byron Dorgan (D-N.D.). The measure has drawn support from a diverse coalition. ''Congress must move swiftly to enact agricultural commodity payment caps to help the neediest farmers here and abroad,'' said Fiorito, whose group, Oxfam America, works on aid projects at home and in the developing world. Paul Gessing, director of government affairs at fiscal watchdog the National Taxpayers Union, endorsed the proposed law and scored the farm payouts as a drain on personal earnings and public revenue. ''Due to the nearly unlimited subsidy payment amounts available under current law, hard working taxpayers end up footing the bill for a program that doesn't even meet its stated justification of preserving family farms. Instead these tax dollars are easily converted into subsidies for large agribusinesses who are eager to evade free-market competition,'' Gessing said. Other tax-focused endorsers include Taxpayers for Common Sense and The Council for Citizens against Government Waste, which estimated that the law would ''save taxpayers at least $1.2 billion over the next decade.'' ''Unfortunately, our farm subsidies don't help most farmers or the environment,'' said Scott Faber, farm policy campaign director at Environmental Defense. Among his group's concerns: that payouts to large farm companies have encouraged them to expand operations and to plow up sensitive lands. ''Now is our chance to reform farm programs to reward economic innovation, rather than dependence, and to link payments to environmental performance, rather than production,'' Faber said. Other endorsers of the proposed legislation include Bread for the World, Free Enterprise Fund, Isaak Walton League of America, and the National Catholic Rural Life Conference. Bush also has voiced his support, as have some family farmers. The measure's introduction on Feb. 15 coincided with a warning from the U.N.'s Food and Agriculture Organization (FAO) that billions of farmers' livelihoods are imperiled by protectionism and falling commodity prices. Some 2.5 billion people in the developing world who rely on farming face food insecurity as a result of trade barriers and subsidies, the FAO said in its latest report on the state of agricultural commodity markets. Developing nations that rely heavily on one or only a few agricultural products are at greatest risk, the agency said. For 43 developing countries, more than 20 percent of their export incomes come from the sale of just one product. These countries are mainly situated in Sub-Saharan Africa, Latin America, and the Caribbean. |
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