A RICH CROP OF SUBSIDIES

A RICH CROP OF SUBSIDIES
Chicago Tribune: It's nothing new to find a farmer in one area harvesting a bumper crop while another nearby comes up short, but this year the variations are unusually extreme. Because of the summer drought, some downstate Illinois producers are barely taking in any corn or soybeans, even as neighbors blessed with plenty of cloudbursts are chalking up some of their best yields ever.
True to form, Congress has a plan to even the score with emergency aid. Over the half-hearted objections of the Bush administration, the Senate has approved a lavish, $6 billion valentine to the rural heartland that is gathering momentum as the November election looms.
Turns out, some country folks have noticed that the Farm Bill signed in May would have delivered a similar amount of compensation if overproduction had driven down prices. So to their way of thinking, sending the checks anyway makes perfect sense, even though the stingy crop has given prices a boost.
American farmers, it seems, can't lose. And by the same machinations, farmers in developing countries can't win. Like a neighbor whose field never gets a drop of rain, poor nations are struggling against the insidious effects of massive agricultural subsidies in the developed world.
Overproduction
Farmers in the U.S. and Europe raked in almost $150 billion in support last year, all but ensuring the overproduction of corn, cotton and the like. That glut of basic commodities hangs over the market, keeping average prices so low in the long term that millions of less-pampered farmers can't hope to compete.
Since agriculture is one of the few industries where the poor probably could compete if not for the uneven playing field, development gets stopped in its tracks. It all makes a mockery of foreign aid, which never fully compensates for the economic effect of the domestic subsidies.
An end to U.S. cotton supports, for instance, would translate into an estimated $250 million of revenue for west and central Africa, where much of the population lives on $1 a day or less. That won't happen, of course, since King Cotton has sewn up those subsidies in Congress.
No wonder poor nations try to protect what's left of their domestic agricultural base by enacting barriers -- free trade be damned.
In the aftermath of the massive Farm Bill, which made the inequities all the worse, the Bush administration floated an interesting theory: Perhaps pouring on subsidies will set the stage for meaningful reductions down the line. It worked in the Cold War, when enormous U.S. expenditures eventually led to arms reductions, the thinking goes.
Certainly these bloated federal farm payments leave plenty of room to scale back at the bargaining table. But it's ridiculous to pretend they were enacted because of some grand global strategy.
This is all about domestic politics in the U.S. and Europe.