February 01, 2007

Doha Partners Underwhelmed by Administration Farm Bill Proposals

The Bush Administration released its proposals for the 2007 Farm Bill today: Bush Farm Proposal May Snag On Congressional Roadblocks (Greg Hitt, Wall Street Journal, Feb 1):

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December 27, 2006

It turns out that "major commodity programs are highly regressive in the US"

Hertel, Keeney, Ivanic and Winters look at Distributional effects of WTO agricultural reforms in rich and poor countries (World Bank Policy Research Working Paper 4060, Nov 2006), and find:

Rich countries' agricultural trade policies are the battleground on which the future of the WTO's troubled Doha Round will be determined. Subject to widespread criticism, they nonetheless appear to be almost immune to serious reform, and one of their most common defenses is that they protect poor farmers. The authors' findings reject this claim.

The analysis uses detailed data on farm incomes to show that major commodity programs are highly regressive in the United States, and that the only serious losses under trade reform are among large, wealthy farmers in a few heavily protected subsectors. In contrast, analysis using household data from 15 developing countries indicates that reforming rich countries' agricultural trade policies would lift large numbers of developing country farm households out of poverty. In the majority of cases these gains are not outweighed by the poverty-increasing effects of higher food prices among other households.

Agricultural reforms that appear feasible, even under an ambitious Doha Round, achieve only a fraction of the benefits for developing countries that full liberalization promises, but protect U.S. large farms from most of the rigors of adjustment. Finally, the analysis indicates that maximal trade-led poverty reductions occur when developing countries participate more fully in agricultural trade liberalization.

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December 02, 2006

A new farm subsidy claimant

Alexei Barrionuevo reports that fruit and vegetable Farmers Seek Subsidies as U.S. Eats More Imports (NYT, Dec 3).  In the past, fruit and vegetable farmers haven't been as heavily subsidized as commodity producers, such as corn, cotton and rice farmers.   

Not good news with the new farm bill looming:

For decades, the fiercely independent fruit and vegetable growers of California, Florida and other states have been the only farmers in America who shunned federal subsidies, delivering produce to the tables of millions of Americans on their own.

But now, in the face of tough new competition primarily from China, even these proud groups are buckling. Produce farmers, their hands newly outstretched, have joined forces for the first time, forming a lobby group intended to pressure politicians over the farm bill to be debated in Congress in January.

Nobody disputes that competitive pressures from abroad are squeezing fruit and vegetable growers, whose garlic, broccoli, lettuce, strawberries and other products are a mainstay of world kitchens. But the issue of whether the United States ought to broaden farm subsidies beyond the commodity crops like corn and cotton, which have historically been protected, is a big flashpoint.

“This is like the tectonic plates of farm policy shifting, because you have a completely new player coming in and demanding money,” said Kenneth A. Cook, president of Environmental Working Group, a research group in Washington that has been critical of farm subsidies, which are mandated by federal laws that date to the Great Depression.

On the other hand:

The farmers are not asking for the kind of direct subsidies that have been accused of distorting trade and hurting developing countries’ agricultural industries. Hoping to avoid a nasty battle with powerful farm-state politicians in the Midwest and Southeast, they are asking instead for money to help market their products at home and overseas, as well as for research and conservation.

November 25, 2006

Rice reform

Daniel Griswold rips into U.S. rice policy: Grain Drain. The Hidden Cost of U.S. Rice Subsidies (Cato Institute, Nov 16).

The indictment:

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April 21, 2006

How to end the subsidies to "Big Sugar"

Ivan Osorio, Barbara Rippel, and Fran Smith explore some of the options for the Competitive Enterprise Institute (CEI): Is the U.S. Sugar Problem Solvable?:

The United States' sugar policy has a long history of supporting sugar producers, and the current system has its roots in the agricultural programs of the Great Depression. The policy has been widely criticized both at home and abroad for supporting a relatively small group of sugar producers at the expense of consumers, taxpayers, sugar-using industries, and the environment. The program relies on restricting sugar imports to keep domestic prices high, which especially hurts those developing countries that are low-cost producers of sugar. The artificially high price also provides incentives for domestic sugar producers to increase production into environmentally sensitive areas.


This paper explores the possibility of reform of the sugar program by considering other agricultural reforms at home and abroad. The cases examined are New Zealand's agricultural policy reform in the mid-1980s, changes to the United States peanut quota program through a buyout program, and the buyout program for tobacco quota holders in the United States.

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