Harvesting Poverty

The New York Times correctly concludes ag subsidies are "morally depraved"

In less than a month, the world's trade ministers will gather at the World Trade Organization (WTO) meeting in Cancun Mexico to push forward the so-called Doha Development Agenda of trade negotiations. The WTO negotiations in Cancun are supposed to be focused on how to lower the trade barriers that prevent the world's poorest countries from increasing their incomes and enjoying the benefits of globalization. One key to achieving this goal would be cutting domestic agricultural subsidies and export subsidies paid to rich farmers in Europe, the United States and Japan. Farmers in rich countries receive about $1 billion a day in subsidies. Such high subsidies mean that the average European cow earns its owner $2.50 per day. By contrast, some 2 billion people still live on less than $2 per day.

In the run up to the Cancun Ministerial, The New York Times is publishing a superb and aptly named editorial series, "Harvesting Poverty," about the enormous damage that the $320 billion spent annually by rich countries on agricultural subsidies is doing to the world's poorest farmers.

For example, one article details how ag subsidies impoverish Filipino farmers and points out International Monetary Fund estimates that "a repeal of all rich-country trade barriers and subsidies to agriculture would improve global welfare by about $120 billion. An uptick of only 1 percent in Africa's share of world exports would amount to $70 billion a year, some five times the amount provided to the region in aid and debt relief." Another shows how generous subsidies to America's 25,000 cotton farmers, who each have an average net worth of around $1 million, drastically depress world cotton prices and undermine the livelihoods of 2 million cotton farmers in Burkino Faso in West Africa, not to mention millions of other cotton farmers in Asia and Latin America.

Then there is the "Great Catfish War" between Vietnam and Mississippi. Vietnamese catfish farmers are able to produce tasty catfish cheaply. So cheaply that some Mississippi restaurants began selling Vietnamese catfish rather than local catfish. Upset Mississippi catfish farmers turned to Senator Trent Lott, who managed to get a bill passed that declared that of the world's 2000 catfish species, only native American catfish could be labeled and sold as "catfish." Then the U.S. Commerce Department slapped a tariff of 37 to 64 percent on imports of Vietnamese catfish by declaring that Vietnam is a non-market economy and therefore must be "dumping" catfish at below cost on U.S. markets.

Today, The Times is running an editorial that describes how European sugar beet farmers are paid 6 times the world price for their sugar, which is then dumped on world markets. Naturally, poor sugar cane producers in tropical countries cannot compete. The editors of The New York Times are certainly right when they conclude: "By rigging the global trade game against farmers in developing nations, Europe, the United States and Japan are essentially kicking aside the development ladder for some of the world's most desperate people. This is morally depraved. By our actions, we are harvesting poverty around the world." Let's hope that the rich country trade ministers will begin to right this wrong during the upcoming negotiations in Cancun.