It’s been awhile since I posted on the Farm Bill currently waddling its way through Congress.  And I found that The Library of Congress has written a report on the current farm bill, part of which I have arranged as Frequently Asked Questions, and then supplemented with other articles and references.

What is a farm bill, anyway?
The LOC organizes the answer under three headings:

1. The heart of every omnibus farm bill is farm income and commodity price support policy — namely, the methods and levels of support that the federal government provides to agricultural producers. 
2. Farm bills also typically include titles on agricultural trade and foreign food aid, conservation and environment, forestry, domestic food assistance (primarily food stamps), agricultural credit, rural development, agricultural research and education, and marketing-related programs. 
3. Often, such “miscellaneous” provisions as food safety, marketing orders, animal health and welfare, and energy are added. [page 7].

Why does the bill seem so large and complicated?
An aggregate bill allows more legislators from different constituencies to vote for it.  For instance, legislators from farm districts need the votes of legislators from urban districts, so urban assistance clauses are frequently added.  It’s not hard to find areas of agreement, because food is naturally important to everyone.  By including everyone’s pet project, each legislator is able to satisfy his need for good press and bringing benefits to his home district.  Or as the LOC puts it:  “This omnibus nature of the farm bill creates a broad coalition of support among sometimes conflicting interests for policies that, individually, might not survive the legislative process.” [p. 7]. And “So, for example, farm state lawmakers may seek urban legislators’ backing for commodity price supports in exchange for votes on domestic food aid — and vice versa.”

What assistance does Congress get in formulating attractive programs?
Tons of lobbyists.  Those companies who benefit from the Farm Bill, and who have received large sums of money from it, are certainly using a portion of those proceeds to fertilize this high-yield income crop: tax dollars.

Among the groups lobbying Congress will be farm and commodity organizations; input suppliers; commodity handlers, processors, exporters, retailers;

And those who have not been best-served by the Farm Bill in the past:

 foreign customers, and competitors; universities and scientific organizations; domestic consumers and food assistance advocates; environmentalists; and rural communities.

Why should foreigners have anything to say about U.S. Farming and Agriculture?
There are a lot of reasons, and most of them (but not all) involve exports and imports: balance of trade.  The agricultural market is a global one: U.S. cotton is sold overseas; we buy fruit, coffee, and fresh flowers from Latin America.  Furthermore, U.S. citizens are also employed by the import market: in inspection, sales, and distribution, just as with domestic agricultural products.  Primarily, foreign states object to tariffs and unreasonable limits on their exports.  The lobbies of foreign states do not have the power to vote in a Congressional district, but they are certainly intensely aware of Farm Bill legislative activity.  For instance, ABC Australia reports that Australian producers are upset at the likely subsidization of the US Dairy program, which they correctly say distorts the world market price for milk, cheese, and other dairy products.  This objection can stand as the example for many states, some of which do not have as vibrant an economy as Australia, and for other subsidized products on the global agricultural market. 

After a period of consultation starting in July 2005, the US Secretary of Agriculture made clear that he wanted to advocate a bill that was in compliance with the World Trade Organization.

. . . Secretary Johanns has repeatedly stated the USDA’s goal for a new farm bill is that it be “equitable, predictable and beyond challenge”in the WTO.
Equitable relates to the distribution of benefits among farmers and commodities.
Predictable relates to dependably providing assistance, particularly disaster assistance, which has been ad hoc over the past 20 years.
Beyond challenge relates to full compliance with the World Trade Organization (WTO) rules agreed to by the United States and the entire 149-country membership of the organization. [p. 8].

So far, the WTO is not impressed

So is it just about their self-interest as opposed to ours?
Another aspect of the US Farm Bill in which other states are entitled to speak out concern global poverty and also, the way the U.S. is viewed in the world.  In a February speech in the U.S., Director-General of the WTO Pierre Lamy detailed the major contributions of the U.S. in developing multilateral trade.  He went on to discuss the importance of multilateral trade agreements under the WTO.  For agriculture and industry, the WTO provides a “clear, transparent, and predictable environment for trade.”  On agriculture, however, the U.S. has not been building upon its accomplishments, which has been killing the most recent trade talks (The Doha Development Round) Mr. Lamy said:

Although [agriculture] accounts for less than 10 per cent of world trade, it holds the key to unblocking and revitalizing the negotiations and ensuring substantive progress across the board. Why? Surely because 70% of the world poor live in rural areas and that negotiators when launching these talks agreed to frontload development. 

In short, when the Farm Bill enriches big commodities concerns, it halts other states from creating their own vibrant agriculture, contributing to their poverty.  It also sends a message that the U.S. does not intend to be fair.  Instead of pressing for rules that would advantage all sectors of world trade and all states engaged in world trade, it has settled for privileging one aspect of its own economy above all others.  In response, other states are less amenable to agreement with their own “pet industries” that distort trade, which disadvantages the U.S. consumer and the U.S. manufacturing sector.

So if we want to achieve the “best all around”, what do we advocate?
That depends upon your point-of-view.  Certainly U.S. agricultural lobbies want more of the same–only more.  Consumers, public health advocates, independent farmers, and the rest of the world should not want the provisions we currently have. 

To return to the Library of Congress:  “Farm bills and the programs they encompass are complex and intensely interactive. Changes to one program often have intended and more often unintended consequences for others.”  In adding it all up, one should consider that current policy pays for distorted trade in some agricultural commodities while sidelining the rest; it sidelines other sectors of the U.S. economy through its bloated intransigence; it adds to our whopping deficit; and adds to global poverty and non-development.  Here is Mr. Lamy’s view, with which I concur:

[In the U.S. and E.U.] civil society and tax payers are questioning policies that may preserve agriculture protection at the expense of other countries, in particular poor developing countries. Also, public opinion seems to be in favour of support for the preservation of rural life or the environment, or support for those small farmers with less comparative advantages, rather than lavish government spending that benefits a handful of large farmers or farming companies. In short, what the public points out to — perhaps without knowing — is a good, non-trade distorting farm policy. 

That’s the best all around.

Advertisements