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Do U.S. farm programs hurt world’s farmers?

How do U.S. farm programs affect Third World farmers?

That topic was discussed during a May 13 House Agriculture Committee hearing by a panel of professors and economists, who struggled to make any absolute claims.

“How, if at all, (do) our domestic agriculture policies affect the developing world?” asked Georgia Rep. David Scott.

“There's a grain of truth to what's said. In the past, to the extent we tied the production of crops to subsidy levels ... we tended to depress world prices,” said Bruce Babcock, director of the Center for Agricultural and Rural Development at Iowa State University. “Today, we have the opposite situation. By and large, the programs we have in place have tended to prop up world prices and that’s tended to help world agriculture. I don’t think we’re guilty at all of that anymore — particularly with the kind of programs we’ve adopted.”

Jean Kinsey, director of The Food Industry Center at the University of Minnesota, said it is “well-known” that the U.S. programs lead to problems “with import substitution by other countries — importing corn instead of importing corn (growing) technology. (That has) worked against the development of agriculture in many developing countries. I think we’ve turned the corner on that and we’re doing a lot better in developing not only indigenous crops but indigenous technology.”

It’s undeniable that some U.S. commodity programs “have lowered international prices to the disadvantage of small farmers in poor countries,” said Rob Paarlberg, political science professor at Wellesley College in Massachusetts. That “includes the example of cotton farmers in Africa. At least according to the dispute settlement body of the WTO, our cotton program hasn’t yet corrected all its tendencies to produce that result. So, I think there are some changes on the agenda there.”

However, Paarlberg doesn’t think “that poor farmers in developing countries will magically become prosperous if U.S. agricultural commodity programs (are) reformed. If the U.S. cotton program is changed, it will probably help the most productive cotton farmers in places like China, Brazil or Australia even more than it’ll help impoverished cotton farmers in Africa.

“That isn’t an argument against changing the program. Right now, the program is obliging our government to spend $147 million a year to subsidize the cotton industry in Brazil. … It’s complicated and there is an element of truth to the ‘injury’ argument. But it’s only a small part of the story.”


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