Subsidies' Harvest of Misery
Congress can still act decisively this year to right a wrong that is hurting both small American farmers and the poorest people on the planet. A long-overdue debate is taking place on reform of the 1933 farm bill, passed during the Great Depression to alleviate the suffering of America's family farmers. I was a farm boy then, and the primary cash crops on my father's farm were peanuts and cotton. My first paying job was working for the U.S. Department of Agriculture, measuring farmers' fields to ensure that they limited their acreage and total production in order to qualify for the life-sustaining farm subsidy prices.
Tragically, in its current form this legislation does not fulfill its original purposes but instead encourages excess production while channeling enormous government payments to the biggest producers. This product of powerful lobbyists now punishes small-scale farmers in the United States and is devastating to families in many of the world's least affluent countries.
It is embarrassing to note that, from 1995 to 2005, the richest 10 percent of cotton growers received more than 80 percent of total subsidies. The wealthiest 1 percent of American cotton farmers continues to receive over 25 percent of payouts for cotton, while more than half of America's cotton farmers receive no subsidies at all. American farmers are not dependent on the global market because they are guaranteed a minimum selling price by the federal government. American producers of cotton received more than $18 billion in subsidies between 1999 and 2005, while market value of the cotton was $23 billion. That's a subsidy of 86 percent!
The Carter Center works primarily among the world's poorest people, including those in West Africa whose scant livelihood depends on cotton production. For instance, in 2002 Burkina Faso received 57 percent of its total export revenue from cotton, while Benin depended on cotton exports for more than 75 percent of its national export revenue. Overproduction in the United States leads to the dumping of U.S. cotton on global markets, which drives prices down. In recent years, cotton exported from the United States has been sold 61 percent below its cost of production.
Fragile African economies that depend on agricultural exports, especially cotton, are sometimes devastated by these practices. A 2002 report by Oxfam International estimates that in 2001 sub-Saharan Africa lost $302 million as a direct result of U.S. cotton subsidies, with two-thirds of the loss sustained in eight countries -- Benin, Burkina Faso, Mali, Cameroon, Ivory Coast, Central African Republic, Chad and Togo. Compared with American humanitarian assistance, the subsidies to U.S. cotton farmers amount to more than the U.S. Agency for International Development's total annual budget for all of sub-Saharan Africa.
Two amendments being proposed in the Senate represent the best hopes for fixing what's wrong with the system of crop subsidies. Sens. Richard G. Lugar (R-Ind.) and Frank Lautenberg (D-N.J.) have proposed the Farm, Ranch, Equity, Stewardship and Health Act of 2007 as an amendment to the farm bill; it would replace the subsidies with an insurance program protecting farmers from excessive losses and catastrophes such as flooding or drought. This approach would correct many of the flaws I've noted in the current farm bill. An amendment being circulated by Sens. Byron Dorgan (D-N.D.) and Charles E. Grassley (R-Iowa) would place a $250,000 cap on annual subsidy payments to a farmer. Various schemes under the present law allow these limits to be grossly exceeded, with some big farmers receiving several million dollars annually. Both amendments would go a long way toward making the farm bill fair for farmers at home and abroad.
I am still a cotton farmer, and I have been in the fields in Mali, where all the work is done by families with small land holdings. Cotton production costs 73 cents per pound in the United States and only 21 cents per pound in West Africa, so American farmers do need protection in the international marketplace. But Congress has a moral obligation to protect American agriculture with legislation that will serve our national interests, that will feed hungry people and that does not suppress the ability of the poor to work their way out of poverty.